Why I Can’t Stop Buying This Trillion-Dollar Juggernaut Even as June Volatility and the Fed Threaten to Shake Wall Street

I bought more Microsoft (NASDAQ:MSFT | MSFT Price Prediction) this morning, and I will probably buy more before the week ends. The stock is down 7.02% over the past week and 17.47% year to date, and every red candle has made me a more eager owner of a roughly $2.95 trillion business that is still growing like a mid-cap.

The thesis I keep coming back to is simple. Microsoft runs two engines almost no other company on earth runs at the same time. The legacy software franchise (Windows, Office, the entire Microsoft 365 stack) is a predictable cash-generation machine that funds everything else, and the AI and cloud side is compounding faster than the tape wants to admit. As I see it, short-term panic is creating an attractive entry point for long-term holders while Wall Street stares at the Fed.

The Numbers That Keep Me Adding

In Q3 FY2026, Microsoft posted EPS of $4.27 against a $4.07 consensus, the fourth consecutive quarter topping Wall Street. Revenue hit $82.89 billion, up 18.3% year over year. Intelligent Cloud grew 30% to $34.68 billion, with Azure expanding 40%. Net income climbed 23.06% to $31.78 billion. Those are growth metrics I would happily pay up for in a small-cap.

The forward book is what locks me in. Commercial remaining performance obligations now sit at $627 billion, up 99% year over year. The AI business alone runs at a $37 billion annual run rate, growing 123%. Satya Nadella framed it plainly: “Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.”

Then there is the quality of the balance sheet. Return on equity is 33.28%, operating margin is 45.62%, and net debt to EBITDA is 0.187. Last quarter Microsoft returned $12.7 billion to shareholders through dividends and buybacks, up 32%. At a P/E of 29, I am paying a fair multiple for a business compounding equity at a third.

The Risk I Actually Lose Sleep Over

Capex. Q3 CapEx hit $30.88 billion, up 84.39% year over year, and OpenAI investment losses widened to $3.1 billion from $523 million a year earlier. If those AI dollars fail to earn their cost of capital, the thesis bends.

What steadies me is the vertical integration playbook. Microsoft is developing proprietary, in-house AI silicon to drastically lower costs and reduce its long-term reliance on external chip suppliers. RPO nearly doubling tells me the demand is real. Custom silicon tells me management intends to keep the margin as it scales. The OpenAI restructuring also handed Microsoft a roughly 27% stake valued around $135 billion, with IP rights extended through 2032 and an incremental $250 billion of Azure consumption locked in.

Why I Keep Adding On Weakness

Polymarket currently prices $390 as the modal June outcome at 78.5% probability, and Reddit sentiment has slid from a peak of 85 in late May to 38 this week. The underlying business signal is an Azure book that crossed $75 billion annually at 34% growth in FY2025 and a free cash flow base of $71.61 billion.

I keep buying because the price is moving against me while the business is moving with me, and over a long enough horizon that gap closes in one direction.

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