Microsoft Backlog Hits Record $678 Billion as Tech Sector Sees Boost

Microsoft's commercial backlog has grown to an astonishing $678 billion, fueling investor optimism about the tech giant's future prospects. This massive figure represents roughly 7.5 times Microsoft's quarterly revenue of $90 billion.

The company's quarterly revenue jumped 18% to $90 billion, with Azure and other cloud-services revenue surging 43%. Its commercial remaining performance obligations expanded by a significant 84%.

Nvidia's recent outlook has reignited the technology trade, causing Microsoft shares to climb approximately 1.4% to $503.12. This price sits 13.18% below its GF Value estimate of $579.48, which could be seen as a tempting discount given the substantial backlog.

However, execution remains crucial for Microsoft. The company must convert contracted AI demand into revenue and free cash flow before the costs of building data centers outweigh the returns.