Microsoft (MSFT) stock has lagged big-tech peers due to concerns over rapidly expanding capital expenditure (CapEx), particularly in AI. In Q1, CapEx rose to $34.9 billion, reflecting demand for cloud and AI offerings like Azure. Despite investor skepticism, revenue grew 18% to $77.7 billion, with strong margins and free cash flow.

Commercial bookings surged 112% in Q1, driven by Azure commitments and enterprise contracts. Commercial RPO increased to $392 billion, showing strong revenue visibility. Cloud revenue reached $49.1 billion, with Intelligent Cloud revenue up 28%. Analysts maintain a “Strong Buy” consensus on Microsoft stock.

Despite concerns over CapEx, Microsoft’s financials remain strong, with revenue growth, expanding earnings, and robust free cash flow. The company’s cloud business is well-positioned for growth, with Azure and AI services experiencing strong demand. While investment levels may pressure margins, Microsoft’s solid execution and long-term outlook support a positive view on the stock.

Read more at Yahoo Finance: Should You Buy Microsoft Stock Despite Its Ballooning CapEx?