Key Points
Microsoft (NASDAQ: MSFT) has established itself as a leader in the artificial intelligence (AI) sector, primarily through its Copilot virtual assistant and Azure cloud platform. However, concerns have arisen regarding modest adoption rates of Copilot among enterprise customers, with only 15 million licenses sold, equating to a penetration rate of just 3.7% as of the end of fiscal Q2 2026.
As of December 31, Microsoft reported a $625 billion order backlog, a 110% increase year-over-year, attributed in large part to OpenAI. Despite Azure’s impressive growth—reporting over 39% revenue growth for three consecutive quarters—there are worries about dependency on OpenAI’s financial health. Currently, Microsoft’s stock is down 25% from its peak, making it the cheapest it’s been in over three years, with a price-to-earnings (P/E) ratio of 25.3.
