Contemplating an Investment in Microsoft?
Microsoft's cloud computing platform, Azure, is making significant strides in the competitive cloud infrastructure market. As one of the key players, Azure holds approximately 22-25% of the global market share, making it the second largest cloud provider after Amazon Web Services (AWS), which has around 29-31%.
Azure's Growing Momentum
Azure's growth rate outpaces AWS’s, which is around 15-21%, highlighting Azure’s accelerating momentum. This rapid expansion is largely driven by Azure’s strategic focus on AI infrastructure and services. In Q2 FY25, AI services alone added 13 percentage points to its 31% year-over-year revenue surge, with Microsoft’s AI business hitting a $13 billion annual run rate, growing 175% from the previous year.
Microsoft's Investments in AI
Microsoft's investments in AI are evident, as the company is a major investor in OpenAI, the company behind ChatGPT. While Microsoft is not the sole owner of OpenAI, its partnership underscores its commitment to AI technology.
In Q3 2025, Microsoft plans to spend $30 billion on building AI data centres, further solidifying its position in the AI market.
Microsoft's Financial Performance
Microsoft's financial performance reflects its growth in the cloud computing sector. The company exceeded Wall Street expectations in its Q4 FY 2025 results, and its stock price has soared, approaching the $4 trillion market cap threshold.
Despite its high valuation, Microsoft's stock is not wildly overpriced, at least not by the standards of big tech stocks. For instance, Microsoft stock is cheaper than shares in Nvidia or Amazon, according to recent figures.
Looking Ahead
As Microsoft continues to invest heavily in AI and cloud infrastructure, it is on track to join the $4 trillion club, following in the footsteps of Nvidia. If you're looking for a stable, long-term way to ride the AI wave, Microsoft is still one of the best bets out there.
Microsoft's stock gained over 460% in three years during the dotcom bubble of the late 1990s, and it has recovered from the 50% drop it experienced during the subsequent three years as the dotcom bubble crashed.
Investors don't need to look much further for an AI name to buy and hold, according to Matt Britzman, senior equity analyst at Hargreaves Lansdown. If the past is any indication, Microsoft could continue to be a strong contender in the AI and cloud computing markets.
Meanwhile, reports suggest that OpenAI is exploring the possibility of ending its exclusive use of Azure in favour of other partners. This potential shift could impact Azure's market position, but it also underscores the dynamic nature of the tech industry, where competition and innovation are constant forces.
[1] Microsoft Azure Revenue Surpasses $75 Billion Annually in 2025
[2] Microsoft Azure's AI Business Hits $13 Billion Annual Run Rate
[3] Azure's Growth Rate Outpaces AWS
[4] Microsoft Azure's Market Share
Azure's rapid expansion in the cloud infrastructure market is propelled by its strategic investments in artificial-intelligence, as evident in the $13 billion annual run rate of its AI business.
With Microsoft's plans to spend $30 billion on building AI data centres in the near future, it shows a commitment to further investing in technology and artificial-intelligence.
