{"id":31850,"date":"2026-05-08T03:53:09","date_gmt":"2026-05-08T03:53:09","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/31850\/"},"modified":"2026-05-08T03:53:09","modified_gmt":"2026-05-08T03:53:09","slug":"is-microsoft-a-good-long-term-investment-in-2026","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/31850\/","title":{"rendered":"Is Microsoft a good long-term investment in 2026?"},"content":{"rendered":"\n

Since its earliest beginnings, Microsoft (MSFT<\/a>) has positioned itself at the center of technological transformation, and innovations like MS-DOS, Microsoft Office, subscription software models, and Azure cloud infrastructure have created significant wealth for investors.<\/p>\n

According to Fortune<\/a>, if you had invested $1,000 at the time of Microsoft\u2019s IPO<\/a> in 1986, you\u2019d be sitting on roughly $5.5 million today.<\/p>\n

But despite Microsoft\u2019s consistently strong earnings, double-digit growth, and massive cash flow, its future as a sure-fire investment is no longer written in stone, due to increased competition and its enormous bets on artificial intelligence (AI<\/a>).<\/p>\n

Microsoft is spending staggering amounts \u2014 $190 billion in 2026 alone \u2014 on AI data centers, chips, networking, and cloud capacity, which has simultaneously impressed, excited, and unnerved Wall Street<\/a>.<\/p>\n

This concern shows in MSFT\u2019s performance: As of May 2026, Microsoft’s shares are down approximately 13% year to date<\/a>; however, its earnings don\u2019t reflect a company in decline.<\/p>\n

Many long-term investors see the stock’s consolidation as a buying opportunity, though they must now assume greater risk.<\/p>\n

Here\u2019s everything you need to know before you invest in MSFT this year.<\/p>\n

What\u2019s going on with Microsoft in 2026? <\/p>\n

Continuous evolution has always been a core part of Microsoft\u2019s strategy, and right now the company sits at the center of two of the most powerful forces in tech: cloud computing and AI.<\/p>\n

And while investors are always impatient to see ROI, Microsoft\u2019s recent financial results prove these forces are generating momentum. In its fiscal third quarter of 2026, MSFT reported record revenue<\/a> of $54.1 billion, a 29% year-over-year increase.<\/p>\n

Its AI business surpassed $37 billion in annual revenue, up 123% year over year.<\/p>\n

Azure and other cloud services grew 40%, driven by AI demand, and sales and income exceeded analyst expectations.<\/p>\n

Related: How many employees does Microsoft have in 2026? MSFT\u2019s workforce, locations & layoffs explained<\/a><\/p>\n

\u201cWe are at the beginning of one of the most consequential platform shifts,\u201d Chairman and CEO Satya Nadella<\/a> said, adding, \u201cWe are also hard at work changing the way we work.\u201d<\/p>\n

But the company\u2019s earnings also revealed why investors remain nervous. Microsoft is spending staggering amounts on its AI infrastructure, at $190 billion in 2026 ($25 billion of which is due to higher component prices), which caused the company\u2019s quarterly operating expenses to shoot up 9%.<\/p>\n

And while Microsoft has integrated its suite of Copilot AI tools into Windows, Microsoft 365, Teams, GitHub, and Azure, it has struggled to convert these tools’ users into paying AI customers, reporting just 20 million paid Copilot subscribers in the quarter.<\/p>\n

In total, Microsoft has more than 1.4 billion active Windows users, meaning only 3\u20134% of them are actually paying for the premium version of the company’s AI assistant.<\/p>\n

Related: Microsoft\u2019s logo over the years: A timeline of innovation<\/a><\/p>\n

In addition, Microsoft’s AI investments have come at a very human cost. The company slashed 15,000 jobs in 2025, according to Yahoo! Finance<\/a>, which cited a memo from Xbox Executive Phil Spencer, who said that the workforce reduction was a \u201cnecessary\u201d move that would \u201cincrease agility and effectiveness\u201d for Microsoft.<\/p>\n

Layoffs have unfortunately become a common symptom of the AI age, and while some companies, like IBM<\/a> (IBM), Duolingo (DUOL), and Klarna (KLAR<\/a>) cite machine learning as a direct replacement for human workers, others, like Meta Platforms (META<\/a>), Oracle (ORCL<\/a>), and Microsoft, are using workforce reductions to free up more capital for AI investments<\/a>.<\/p>\n

It appears the job cuts will continue for Microsoft workers in 2026. On the earnings call<\/a>, Chief Financial Officer Amy Hood stated that, as \u201cwe continue to evolve how we operate to increase our pace and agility \u2026 we expect headcount will decrease year-over-year.\u201d<\/p>\n

What happened with Microsoft and OpenAI? <\/p>\n

Microsoft\u2019s unwinding relationship with OpenAI makes its 2026 narrative even more complicated. On April 27, 2026, MSFT announced<\/a> that it would no longer be the AI platform\u2019s exclusive partner, freeing OpenAI to work with other companies such as Amazon (AMZN<\/a>) and Alphabet (GOOG).<\/p>\n

Since 2019, when Microsoft invested $1 billion in OpenAI\u2019s newly formed for-profit business, Microsoft served as the sole distributor of OpenAI’s technology<\/a>, which was restricted to running only on the Azure cloud platform.<\/p>\n

Related: Where is Microsoft\u2019s headquarters? Inside the tech giant\u2019s corporate campus<\/a><\/p>\n

Nadella himself stepped in and mediated when OpenAI\u2019s CEO, Sam Altman<\/a>, was briefly ousted from the company in 2023 due to internal board conflicts.<\/p>\n

But the companies\u2019 relationship became increasingly strained in recent years because Microsoft could not keep up with OpenAI\u2019s ever-increasing supply demands. And while the restructuring agreement does allow OpenAI to work with other cloud providers, it also gives Microsoft a 27% stake in the company, which analysts view as a net positive for Microsoft in the long run.<\/p>\n

Is MSFT a good buy now? <\/p>\n

They say that fortune favors the bold, and in Nadella\u2019s 12-year tenure as the head of Microsoft, he\u2019s not only helped turn the company around; he\u2019s transformed it into a $3 trillion powerhouse and a leader in cloud computing.<\/p>\n

AI is his next frontier, and he is aligning Microsoft accordingly, most analysts believe. A survey by 24\/7 Wall Street<\/a> recently found that 55 of 58 analysts rated MSFT a \u201cBuy\u201d or \u201cStrong Buy,\u201d with just 3 \u201cHolds\u201d and no \u201cSell\u201d ratings, and consensus price targets indicated significant upside from current levels.<\/p>\n

Dow company histories:<\/p>\n

According to Seeking Alpha<\/a>, the fact that Microsoft is now trading at a lower earnings multiple than it did during the cloud era \u201cdoesn\u2019t make any sense.\u201d<\/p>\n

This could be investors\u2019 chance to buy the tech giant at a relative discount.\u00a0After all, when the Federal Reserve Bank of Richmond states<\/a> that AI investments are now a larger contributor to the economy than consumer spending, accounting for nearly 92% of GDP<\/a> growth in the first half of 2025, it seems to indicate the AI sector remains a growth opportunity. The massive AI investments companies like Microsoft are making may end up delivering substantial returns \u2014 sooner or later.<\/p>\n

Related: History of Microsoft: Company timeline & facts<\/a><\/p>\n

This story was originally published by TheStreet<\/a> on May 7, 2026, where it first appeared in the Investing<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Since its earliest beginnings, Microsoft (MSFT) has positioned itself at the center of technological transformation, and innovations like…\n","protected":false},"author":2,"featured_media":31851,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[420,7829,320,419,7828,10793],"class_list":["post-31850","post","type-post","status-publish","format-standard","has-post-thumbnail","category-microsoft","tag-azure","tag-azure-ai","tag-microsoft","tag-microsoft-365","tag-microsoft-ai","tag-microsoft-office"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/31850","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=31850"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/31850\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/31851"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=31850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=31850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=31850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}