Microsoft Had Its Best Quarter in 28 Years. Is it Too Late to Buy the Stock?

MSFT just posted its best quarterly stock performance in 28 years, surging 38% in Q3, and the numbers behind the move are doing the heavy lifting.

Revenue grew 18% to $90 billion. Azure cloud services jumped 43%, the standout driver of the quarter. The company also closed with a $678 billion backlog, which points to contracted demand extending well beyond the current period.

Despite the rally, analysts still rate MSFT a buy. The stock trades at 25.1x forward earnings, a valuation they argue is supported by its position in AI and cloud computing and by its growth prospects.

Interpretation: a 38% quarterly run raises the usual question of whether the easy gains are gone. The case against that rests on the backlog and Azure growth rate. A $678 billion backlog against $90 billion in quarterly revenue suggests the revenue pipeline is well covered, though that is our read of the figures, not a company forecast.