Get Microsoft alerts:<\/p>\n
Sign Up<\/p>\n
Microsoft Today \u25bc<\/p>\n $555.45<\/p>\n Dividend Yield0.91%<\/p>\n P\/E Ratio23.98<\/p>\n Price Target$560.88<\/p>\n Microsoft also\u00a0retains\u00a0a license to OpenAI\u2019s models and products through 2032. However, that license is\u00a0now\u00a0non-exclusive as well.\u00a0For its part,\u00a0OpenAI has committed to\u00a0purchasing\u00a0$250 billion\u00a0in Azure compute services, and revenue share payments from OpenAI to Microsoft will continue through 2030, subject to a total cap.<\/p>\n With MSFT down over 15% in 2026 and\u00a0investors questioning the company\u2019s artificial intelligence (AI) infrastructure ambitions,\u00a0it\u2019s\u00a0fair to wonder: What\u2019s\u00a0in it for Microsoft? The answer is not found in\u00a0technology, but in a more boring place\u2014Microsoft\u2019s balance sheet.<\/p>\n A $13 Billion Bet That Keeps Paying Off<\/p>\n Microsoft invested\u00a0approximately\u00a0$13 billion\u00a0in OpenAI between 2019 and 2023. Management targeted a\u00a0$92 billion\u00a0return on that investment.<\/p>\n As it turns out, that number was far too conservative.\u00a0In October 2025, OpenAI completed its reorganization as a for-profit entity.\u00a0In doing so,\u00a0Microsoft\u2019s economic interest in OpenAI was pegged at 26.79% on a fully diluted, as-converted basis.<\/p>\n The restructuring\u00a0represented\u00a0a clean accounting event for\u00a0Microsoft. In the nine months ending March 31, 2026, Microsoft recorded $5.9 billion in net gains from its OpenAI investment\u2014a sharp reversal from $2.7 billion in net losses during the same period a year earlier.<\/p>\n The losses reflected how Microsoft accounts for its OpenAI stake: under equity-method accounting, Microsoft recognizes its proportional share of OpenAI’s actual operating results. Since OpenAI has been burning through cash at a significant rate, Microsoft was absorbing its share of those losses directly on its income statement.<\/p>\n The swing to a gain wasn’t from OpenAI suddenly turning profitable\u2014it came from a one-time event. When OpenAI restructured into a Public Benefit Corporation in October 2025, it triggered a dilution gain for Microsoft: Microsoft ended up owning a smaller percentage of OpenAI, but the implied valuation of the company rose so much faster than ownership fell that Microsoft could book the difference as income.<\/p>\n The Largest Private Funding Round in History<\/p>\n On Feb. 27, 2026, OpenAI raised\u00a0$110 billion\u00a0at a\u00a0$730 billion\u00a0pre-money valuation\u2014the largest private funding round in history. A month later, it expanded that round to\u00a0$122 billion, closing at a post-money valuation of\u00a0$852 billion.<\/p>\n At that valuation, Microsoft’s 26.79% stake is worth\u00a0$228.3 billion, which is\u00a0a 17.6x multiple on its\u00a0$13 billion\u00a0investment. No other large investor even comes close to that level of return.\u00a0More significantly, after the lock-up period following an IPO, Microsoft could sell all or a portion of that equity without violating any obligations to OpenAI.<\/p>\n Critically, an IPO would not\u00a0terminate\u00a0the partnership.\u00a0The\u00a0commercial agreements, including the Azure commitment and IP licensing, run on their own contractual track through 2030 and 2032, respectively, independent of any change in OpenAI’s public or private status.<\/p>\n How Microsoft Could Deploy the Proceeds<\/p>\n That leads to another question.\u00a0Is Microsoft\u00a0planning to deploy that cash? This is speculation, but speculation\u00a0that\u2019s\u00a0worth considering.<\/p>\n To begin with, Microsoft\u00a0doesn\u2019t\u00a0need\u00a0the cash. However,\u00a0it\u2019s\u00a0committed to\u00a0an annualized AI capital expenditure (CapEx) run rate of\u00a0about\u00a0$190 billion<\/a>.\u00a0In\u00a0the\u00a0first half of fiscal 2026<\/a>\u00a0alone, Microsoft spent more on CapEx than in\u00a0all of\u00a0fiscal year 2025. Any large liquidity event would\u00a0almost certainly\u00a0flow toward accelerating this buildout, particularly given that demand is outrunning supply.<\/p>\n CFO Amy Hood has acknowledged the company expects to remain capacity constrained through 2026, with next quarter’s CapEx alone projected to exceed\u00a0$40 billion. A staged sell-down of OpenAI equity post-IPO\u00a0(i.e.,\u00a0selling in tranches rather than all at once)\u00a0would give Microsoft a\u00a0market-friendly mechanism to fund that buildout without issuing debt or\u00a0pressuring its own stock<\/a>.<\/p>\n The Valuation Case for MSFT<\/p>\n More significantly for MSFT shareholders is what this accounting event may mean for the\u00a0company’s valuation<\/a>. As of May 12, Microsoft is trading around $408, putting its market cap at\u00a0$3.03 trillion. However, the stock is still well below its 52-week high of $555.45. That means Microsoft’s\u00a0$228 billion\u00a0OpenAI stake represents about 8% of its entire market cap.<\/p>\n Putting that another way: investors are getting the core Microsoft business\u2014Azure, Office 365, LinkedIn, Dynamics, GitHub\u2014at a valuation near a multi-year low on operating earnings metrics, while the $228 billion OpenAI position effectively rides along at no incremental cost.<\/p>\n Meanwhile, OpenAI’s Azure consumption is recognized as revenue within Microsoft’s AI business line, which is now running at a\u00a0$37 billion\u00a0annual rate, up 123% year over year.\u00a0Even if Microsoft never sells a single share of OpenAI, the\u00a0$250 billion\u00a0Azure commitment alone\u00a0represents\u00a0a locked-in revenue stream that will compound through the end of the decade.<\/p>\n Before you consider Microsoft, you’ll want to hear this.<\/p>\n MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks<\/a> that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Microsoft wasn’t on the list.<\/p>\n While Microsoft currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.<\/p>\n![\"Microsoft](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/05\/microsoft-corporation-logo.png\"){kind=logo}
$402.11 -5.66\u00a0(-1.39%) As of 09:30 AM Eastern This is a fair market value price provided by Massive. Learn more.<\/a>52-Week Range$356.28<\/p>\n
![\"7](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/05\/20250304153430_reportpreview2025-03-7-ai-stocks-to-invest-in-toda.png\")
<\/p>\n