Satya Nadella's Microsoft Disclosed Azure Topped $100 Billion in Annual Sales for the First Time -- but MSFT Has Trailed the Market All Year. Is the Stock Still a Buy?

Microsoft's Azure cloud division crossed $100 billion in annual revenue for the first time, the company disclosed, marking a major milestone even as MSFT shares lag broader markets in 2025. The stock is up just 3% year-to-date, trailing the market amid investor concerns over capital intensity and competitive positioning.

MSFT reported fiscal 2026 revenue of $332 billion, up 18%, while net income climbed 31% to $134 billion. Despite the strong earnings growth, the company faces scrutiny over its $116 billion capital expenditure footprint—spending heavily to build AI infrastructure as competition with GOOGL and AMZN intensifies.

Valuation remains a sticking point. MSFT trades at a premium to both Alphabet and Amazon, while investors question whether its AI platform can defend market share against rivals. The revenue beat and Azure's breakthrough moment haven't translated into share-price momentum, suggesting the market is demanding proof that massive capex will translate into durable returns.