Microsoft Corporation
Microsoft Corporation, a technology company, develops and supports a portfolio of technology solutions for individuals and businesses worldwide. Its products include operating systems, server applications, business solution applications, software development tools, desktop and server management tools, and video games; and devices, such as PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. The company's Productivity and Business Processes segment offers Microsoft 365 Commercial, Enterprise Mobility + Security, Power BI, Exchange, SharePoint, Microsoft Teams, Microsoft 365 Security and Compliance, Microsoft 365 Copilot, and Windows Commercial on-premises and Office licensed on-premises. This segment also provides Microsoft 365 Consumer products and cloud services; LinkedIn, including talent solutions, marketing solutions, subscriptions, and sales solutions; Dynamics 365, a set of cloud-based applications; and on-premises ERP and CRM applications. Its Intelligent Cloud segment offers server products and cloud services; cloud and AI consumption-based services, GitHub cloud services, health and life sciences cloud services, as well as virtual desktop offerings, and other cloud services; SQL Server, Windows Server, Visual Studio, System Center, and related client access licenses; and enterprise support services, industry solutions, Microsoft partner network, and learning experience. The company's More Personal Computing segment provides Windows OEM licensing and devices comprising Surface and PC accessories; XBOX hardware, and XBOX first- and third-party content and services; XBOX Game Pass and other subscriptions; XBOX Cloud Gaming, advertising, and other cloud services; and search advertising consisting of Bing, Copilot, Microsoft News, Microsoft Edge, and third-party affiliates. It sells its products through partners and retail networks. The company was founded in 1975 and is headquartered in Redmond, Washington.
What does it do?
Microsoft makes the software that runs much of the world's work. If you've ever used Word, Excel, or PowerPoint, you've used their products. They also run Azure, a massive network of computer servers that businesses rent instead of building their own — think of it like renting computing power the way you rent a Netflix subscription. On top of that, they own Xbox, LinkedIn, and GitHub, and they're the biggest backer of OpenAI, the company behind ChatGPT.
Microsoft is at the center of the AI gold rush — every business trying to adopt AI is essentially a potential Microsoft customer, since they've baked AI tools called Copilot into nearly every product they sell. With a market cap of nearly $3 trillion, it's one of the two or three most valuable companies on Earth, meaning big swings in its stock move the entire market. Investors are watching it as a real-time scorecard for whether AI spending by businesses is actually turning into real revenue.
How does it make money?
Microsoft makes money through three main buckets. First, Productivity and Business Processes — this includes Microsoft 365 subscriptions (like Office for businesses), LinkedIn, and Dynamics business software. Second, Intelligent Cloud — this is Azure, their cloud computing platform, which is growing fast and competing directly with Amazon AWS. Third, More Personal Computing — this covers Windows, Xbox, and Surface devices. Total revenue hit $281.7 billion last year, up from $245.1 billion the year before, a jump of about 15%. Net income — the money left after all costs — was a remarkable $101.8 billion, meaning roughly 36 cents of every dollar in revenue became profit.
Why do investors care?
The growth story is simple: every company in the world is trying to use AI, and Microsoft has positioned itself as the tollbooth. By embedding AI Copilot features into Teams, Word, Excel, and Azure, they can charge existing customers more without having to find new ones. Azure is growing at double-digit rates and taking share in the cloud market, which is still expanding rapidly. For the thesis to work, businesses need to keep spending on AI tools and cloud infrastructure — and so far, the data suggests they are.
Deep Dive
MemberA full investor briefing on Microsoft Corporation — history, leadership, risks, and outlook.