Moody's Reaffirms Aaa Rating for Microsoft on Strong Profitability

Moody's has reaffirmed its Aaa rating for Microsoft Corporation (), citing the company's substantial operating scale, strong profitability, and diversified business profile.

The ratings agency expects Microsoft's revenue to grow by about 18% to 19% over the next 12 to 24 months, reaching approximately $466 billion in the fiscal year ending June 2028, driven by growth in Azure cloud services and Microsoft 365 commercial offerings.

However, Moody's notes that operating margins will likely decline modestly over this period from the 47% level in FY 2026 due to increasing contribution of Azure cloud services, which carry lower gross margins, and large investment in AI infrastructure and product offerings.

The company's capital- and compute-intensive nature is expected to remain high, with capital expenditures remaining in the high-40% range as a percentage of revenue over the next 12 to 24 months, nearly four times the pre-AI level.