Key Points
Microsoft Corporation (NASDAQ: MSFT) has seen a 15% stock increase in 2025, lagging behind the S&P 500’s 16% growth. Despite this, the company is positioned as a major player in artificial intelligence (AI) and could see significant gains in 2026. Notably, billionaire investors Peter Thiel and Daniel Loeb increased their stakes in Microsoft during the third quarter of 2025, with Thiel investing $25 million, marking it as his second-largest holding, and Loeb doubling his stake, now constituting 6.9% of his portfolio.
Microsoft has formed key partnerships in the AI sector, especially with OpenAI, where it holds approximately 27% ownership. In the fiscal first quarter ending September 30, 2025, Microsoft’s revenue rose 18% year-over-year, driven by its cloud service Azure, which grew 40% in the same period. However, Microsoft’s current price-to-earnings ratio stands at 35, indicating it could be viewed as an expensive investment compared to faster-growing rivals.
