Microsoft may not be the most actively traded stock, but it stands out as a long-term investment due to its strong business fundamentals. While Nvidia and Tesla see significantly higher daily trading volumes, Microsoft averages around 27 million shares a day. However, its AI business is generating $37 billion in annual revenue, up 123% year over year, and its commercial backlog has grown to $678 billion, indicating robust demand.
Microsoft's cloud business, particularly Azure, is a key driver of its growth. In fiscal Q4 2026, Microsoft reported $90 billion in revenue, up 18% year over year, with Azure growing 43%. For the full fiscal year, Azure topped $100 billion in revenue, growing 41%, and total Microsoft Cloud revenue exceeded $214 billion. This growth underscores the company's ability to turn short-term trading activity into long-term cash flow.
The company is heavily investing in AI and cloud infrastructure, with capital expenditures and finance leases totaling $41 billion in the most recent quarter, up 69% year over year. Despite a 15% to 20% stock drop in 2026 due to concerns about AI spending, Microsoft's commercial bookings grew 18%, and its backlog of contracted but not yet delivered revenue grew 84%. This backlog suggests strong customer commitments across various industries.
While trading volume measures short-term attention, Microsoft's underlying business metrics point to a solid five-year holding prospect. The company's heavy investment paired with a growing backlog of signed business makes it a compelling long-term investment, despite the risks associated with its massive bets on AI and cloud infrastructure.