Microsoft's $678 Billion Backlog Shields It from Rising Yields

Microsoft's commercial backlog has reached an impressive $678 billion, which is roughly equivalent to 7.5 quarters of its current revenue.

This figure helped the tech giant resist a brutal week for rate-sensitive technology stocks, despite rising yields forcing investors to demand more from companies priced for future growth.

Microsoft's fiscal fourth-quarter revenue surged 18% to $90 billion, with Azure revenue skyrocketing 43%. The company's commercial remaining performance obligations exploded by 84%, fueling concerns about cash burn but also providing a valuable cushion against rising interest rates.

The 30-year Treasury yield remained near a 19-year high, punishing distant profits and making it difficult for companies to expand. However, Microsoft can bankroll its expansion internally, unlike weaker rivals that may reach for expensive debt to fund their growth.