<div id="readability-page-1">Microsoft Corporation NASDAQ: MSFT stock is up 20.55%, proving again that investors are willing to overlook valuation if they’re getting a return on that investment. Microsoft is trading at around 38x forward earnings at a slight premium to its historic average. That hasn’t stopped investors from putting a floor on the stock. In fact, the consensus price target for MSFT stock is $612.54, which gives investors 20% upside from its closing price on Sept. 18. Companies like Microsoft and several of its Magnificent Seven counterparts are building and financing the artificial intelligence (AI) economy. Specifically, Microsoft has committed approximately $80 billion in capital expenditures for its 2025 fiscal year. That’s the largest annual infrastructure investment in the company’s history. More than half of that amount is targeted for AI-optimized data center expansions in the United States. The funds will support hyperscale facilities, custom silicon, edge clouds, sustainable energy, and advanced cooling technologies. However, Microsoft also shows that it can continue financing its future growth while delivering shareholder value. The same can’t be said for other technology stocks under scrutiny in 2025. Investors were willing to reward technology stocks without expecting anything in return. But as AI has gone mainstream, investors want to see a return on that investment. <h2>AI Growth Fueled by OpenAI, But Cloud Remains the Core</h2> Microsoft’s AI ambitions have grabbed headlines, largely thanks to its deepening partnership with OpenAI. Since 2019, Microsoft has invested over $11 billion in OpenAI. This partnership gives Microsoft privileged access to OpenAI’s AI models and is critical to the company’s generative AI strategy. Microsoft has exclusive access to large language models (LLMs) like ChatGPT. The company then takes ChatGPT’s cutting-edge capabilities and integrates them into products such as its Copilot in Microsoft 365, GitHub, and Azure services. However, while AI has fueled investor enthusiasm, Microsoft’s cloud business remains the foundation of its growth. Azure’s annual revenue exceeded $75 billion in fiscal 2025, growing 39% year-over-year in the most recent quarter, significantly outpacing Microsoft’s overall AI-related revenue streams and the broader enterprise SaaS segment. With nearly 25% global market share, analysts now see Azure as the top challenger to AWS and the most integrated platform for hybrid and multi-cloud deployments. Azure’s growth is driven by surging demand for high-performance infrastructure from AI workloads, enterprise migrations, and Microsoft’s product ecosystem, as evidenced by quarterly cloud revenue rising to $46.7 billion. <h2>Interplay Between AI and Cloud</h2> AI and cloud are mutually reinforcing. Microsoft leverages OpenAI models to drive Copilot adoption, boost usage across Microsoft 365, and create differentiated cloud services, while Azure’s scale and reliability ensure Microsoft can satisfy both conventional enterprise needs and specialized generative AI tasks. However, despite headlines about AI, Azure’s financial contribution remains much larger. The company’s cloud growth leads Microsoft’s overall results, even as Copilot and AI-powered features attract new enterprise customers and increase average seat value. <h2>Why Microsoft Is a Stock to Own, Not Trade</h2> A company with a market cap of over $3 trillion shouldn’t have a high dividend yield, and Microsoft doesn’t disappoint. But don’t let the 0.55% yield dismiss the value for shareholders. Microsoft has paid the dividend for 23 consecutive years, pays $3.32 per share annually, and has a sustainable payout ratio of just over 24%. The company also delivers shareholder equity with a substantial buyback program, including $3.2 billion in its most recent quarter. However, it’s important to note that Microsoft does this while still generating strong free cash flow (FCF) and honoring the billions it plans to spend on data center growth in the coming years. The company's most recent earnings presentation reported, “Free cash flow was $25.6 billion, up 10% year-over-year, reflecting higher capital expenditures to support our cloud and AI offerings.” This means that Microsoft is generating double-digit FCF while continuing to invest heavily in its future growth. That's an attractive setup for both growth and income investors.<h2>Should You Invest $1,000 in Microsoft Right Now?</h2>Before you consider Microsoft, you'll want to hear this.MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Microsoft wasn't on the list.While Microsoft currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.View The Five Stocks Here </div>

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Microsoft's Azure growth and partnership with OpenAI are driving strong AI adoption, contributing to a 20.55% rise in MSFT stock. The company is investing $80 billion in capital expenditures for 2025, focusing on AI-optimized data centers. Azure's revenue exceeded $75 billion, growing 39% year-over-year, making it a top competitor to AWS. Microsoft maintains a sustainable dividend and strong free cash flow of $25.6 billion, while continuing to invest in future growth. Analysts rate MSFT as a Moderate Buy, but some suggest other stocks may offer better investment opportunities.

- Microsoft Corporation's stock has risen 20.55%, reflecting investor confidence despite a valuation of around 38x forward earnings.  
- The company is investing approximately $80 billion in capital expenditures for fiscal 2025, primarily for AI-optimized data center expansions, while its cloud business, Azure, continues to drive significant revenue growth.  
- Microsoft maintains a sustainable dividend and strong free cash flow, positioning itself as an attractive option for both growth and income investors.

Azure Leads While AI Excitement Fuels Microsoft Stock