Microsoft Corporation remains a Buy despite recent underperformance, driven by elevated CAPEX and margin pressures tied to aggressive AI and cloud investments. MSFT's robust FY26 results included 18% revenue growth and 43% Azure growth, but margins and free cash flow were pressured by hyperscaler spending. Dividend growth slowed to 8% due to higher spending, yet coverage remains strong with a 52% payout ratio and a fortress balance sheet.
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