MSFT crossed $100B in Azure revenue and 30M Copilot paid seats, yet shares sit flat while trading at just 24x forward earnings. Microsoft's AI capex of $116B in FY26, projected to reach approximately $175B in FY27, is the single factor suppressing the stock despite 31% earnings growth. Reaching $700 by 2027 requires Azure to sustain 40%+ growth and Copilot ARPU to expand as capex visibly converts into free cash flow.
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Azure crossed $100 billion in annual revenue, Copilot passed 30 million paid seats, and commercial RPO exploded to $678 billion, up 84%. Yet Microsoft shares are essentially flat on the year. That disconnect is why I'm asking a bigger question.
Can this stock hit $700 by 2027? I think the math works, and I'll show you exactly how. Microsoft just delivered FY2026 revenue of $331.8 billion, up 17.79%, with net income up 31.34%.
And the stock is up 0.03% year to date and down 6.11% over one year. Shares fell 4.4% in the past week even after a 22.3% snapback over the last month. Microsoft spent $115.9 billion, up 79.62% year over year, on AI infrastructure, and FY27 guidance points to roughly $175 billion.
Investors are worried about ROI. With a beta of 1.1, the stock swings when sentiment on AI monetization wobbles. Right now, it's wobbling.
Extract — continue reading at the source.
