Azure Revenue Shift Puts Spotlight on Microsoft's Cloud Business
Microsoft's (MSFT) recent reporting change is about to put even more focus on its Azure business, and that could be good news for the stock. By starting to report Azure's revenue directly, rather than just its growth rate, investors will get a clearer picture of the cloud business' performance.
The company has been investing heavily in artificial intelligence (AI), and Azure is expected to benefit from this focus. The Agents and Infra segment, which includes AI-related revenue, is projected to be much larger than Devices and Consumer, with revenue north of $75 billion for the first quarter of fiscal 2027.
By putting Azure and its AI-related revenue front and center, Microsoft is showing confidence in these areas of its business. For long-term investors, now may be a good time to buy the stock, especially considering it's trading at 28 times its trailing earnings, which isn't expensive compared to other tech stocks.
Microsoft's stock has been rallying since its July earnings release, and this reporting change could help maintain that momentum. With its AI strategy potentially picking up steam, investors may want to consider adding Microsoft to their portfolios as a long-term hold.