Microsoft Stock Gains Despite $190B AI Spending — Q3 Revenue Hits $82.9B

Quick overview

During the US trading session on Friday, the Microsoft stock (MSFT) maintained its previous session’s mild bullish trend and is still showing some gains. Despite its mild gains, the stock has dropped more than 8 percent in June, which was seen as one of its worst months in many years.

The main reason for its strong downward trend can eb attributed to the ongoing worries about Microsoft’s massive spending on artificial intelligence. Microsoft is doing this to make better artificial intelligence systems. This can be witnessed by the companys latest plan, in which they revealed that they are planning to spend nearly 190 billion dollars on new data centers, powerful computers called GPUs, and other AI tools this year.

This huge spending is considered bad for the company in the short term, but for the long term, it helps the company to grow and become stronger.

During the recent quarter, Microsoft spent 37.5 billion dollars on AI, which is 66 percent more than the same time last year. This large difference came because the price of memory chips has increased as many companies want these chips for AI.

Microsoft Business Is Growing Strong

Despite the previous declines in the stock, Microsoft’s business is doing very well. This can be proved by its strong latest quarter (Q3 FY2026) earnings report, in which it revelaed that the company made 82.9 billion dollars in its total sale. Meanwhile, the cloud business was so strong as it earned more than 54 billion dollars. This was nearly 29 percent higher than the same time last year.

Moreover, the Azure cloud part grew fast because many big companies are now using Microsoft AI tools. More than 80 percent of large companies in the US are using these AI services.  Not only this, but the company reported strong Non-GAAP earnings per share of 4.27 dollars, which was up 18 percent to 21 percent from last year. In the meantime, the compans operating income also increased strongly. Despite this company is spending alot on AI, the company is still making healthy profits and growing its business.

On the other side, the company has a huge number of orders from customers that it cannot fulfill quickly because demand is so high. This gives hope that sales will keep rising strongly in the coming months and years.

Many Experts Still Like Microsoft

However, many experts think this is a good chance to buy. The stock looks cheap now compared to its strong business. Technical signs show it may be oversold, meaning it fell too much and could rise soon. Microsoft’s boss, Satya Nadella, says the spending will pay off in the long run because demand for AI is very high. The company has a huge order book and cannot build fast enough to meet all requests.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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