Microsoft Corp

Microsoft builds and sells software, cloud services, and devices used by businesses and consumers worldwide. It makes money from subscriptions like Microsoft 365, cloud computing with Azure, Windows and Surface in personal computing, and advertising and social through LinkedIn and Bing. The company has been adding AI features such as Copilot across its products, and demand for Azure and AI services has been a major growth area.

AI-fueled cloud growth is the current story, but the first question is whether the finances are sturdy—and they are. Debt looks modest, the company can easily afford its interest payments, and profit margins remain very high, giving Microsoft room to invest heavily in AI infrastructure. The trade-off is cash conversion and valuation: big buildouts and long-term leases make cash flow more sensitive to how quickly AI demand ramps, while the stock already prices in a lot at a high multiple of earnings and cash flow. If cloud and Copilot adoption stay strong, the stock can work from here; if ROI takes longer or cloud growth cools, the rich setup leaves room for disappointment. Overall, the balance sheet is solid, but the risk/reward looks balanced near term given the high expectations.