Is Microsoft a worthwhile investment opportunity?
Microsoft's cloud computing platform, Azure, continues to make significant strides in the global cloud infrastructure market. According to recent data, Azure holds approximately 20% of the market share, making it the second-largest cloud provider after Amazon Web Services (AWS), which leads with about 30% [1][2].
This market share for Azure has remained steady around 20% over recent quarters, with continued strong growth driven notably by AI services contributing to revenue gains [1][2]. Different sources slightly vary, but the most consistent estimate is 20%. For example, Synergy Research Group estimates Azure's share at 20% in Q2 2025, stable compared to 20% in the same period a year earlier, while AWS had 30% [1]. Canalys corroborates this 20% figure and highlights Azure's 33% annual growth, partly fueled by AI adoption [2].
Investors have taken note of Microsoft's success in the cloud market. Following Q4 FY 2025 results, Microsoft's stock soared, moving closer to a $4 trillion market cap. The company exceeded Wall Street expectations, with significantly accelerated Azure growth, leading to a 7% increase in the share price immediately after the earnings release [4]. As of close of regular trading on 30 July, Microsoft's stock was priced at 37.6 times trailing earnings and 33.6 times projected earnings [5].
Microsoft's position as a leader in the cloud market is further strengthened by its strategic partnership with OpenAI, the company behind ChatGPT. Microsoft is a major investor in OpenAI, but does not own it. This partnership grants Microsoft rights to OpenAI's intellectual property and benefits from OpenAI's demand for access to Azure [6]. However, it has been reported that OpenAI is exploring the possibility of ending its exclusive use of Azure in favor of other partners [7].
The growth of AI spending is driving a boom in demand for cloud hosting services, making Microsoft a stable, long-term way to ride the AI wave [8][9]. Matt Britzman, senior equity analyst at Hargreaves Lansdown, stated that investors don't need to look much further for an AI name to buy and hold [9]. Microsoft stock is cheaper than shares in Nvidia or Amazon, offering a more accessible entry point for investors [10].
Sources: [1] Business Insider - Aug 1, 2025 [2] Canalys - Jul 10, 2025 [3] Techjury - Jul 9, 2025 [4] CNBC - Jul 28, 2025 [5] Yahoo Finance - Jul 30, 2025 [6] The Verge - Jul 20, 2025 [7] Reuters - Aug 3, 2025 [8] eToro - Jul 25, 2025 [9] Investor's Business Daily - Jul 27, 2025 [10] MarketWatch - Aug 2, 2025
- The growth of Azure, Microsoft's cloud platform, can be attributed largely to AI services, causing a steady 20% market share and significant revenue gains.
- Microsoft's stock price soared following Q4 FY 2025 results, with a 7% increase as investors recognize the company's strategic investments in AI, particularly with their partnership with OpenAI.
- In the rapidly expanding AI market, Microsoft's stock presents an accessible entry point for investors, providing a stable, long-term option to capitalize on the growing demand for cloud hosting services.
