20260130-招银国际-Results_beat_long-term_structural_growth_story_remains_unchanged_8页_818kb

Microsoft (MSFT US) Summary

Core Content and Key Information

Microsoft reported its 2QFY26 results, showing strong performance with revenue reaching $81.3 billion, a 16.7% year-over-year (YoY) increase. This exceeded both the forecast and Bloomberg consensus estimates by 1.5% and 1.2%, respectively. The growth was driven by the Productivity and Business Processes (PBP) and Intelligent Cloud (IC) segments. Operating income rose by 20.9% YoY to $38.3 billion, also surpassing the forecast and consensus by 3.8% and 4.8%.

The Intelligent Cloud segment recorded a revenue growth of 28.8% YoY to $32.9 billion, accounting for 40.5% of total revenue. Azure and other cloud services revenue grew by 39% YoY, slightly below the previous guidance of 37%, but management expects growth to remain in the 37–38% range for 3QFY26. Capital expenditures (capex) in 2QFY26 amounted to $37.5 billion, a 3% increase YoY, with approximately two-thirds of the spending allocated to short-lived assets like GPUs and CPUs to meet growing demand.

Microsoft's management emphasized that supply constraints still exist, with a focus on GPU allocation for first-party applications over Azure. If all newly commissioned GPUs in 1HFY26 were allocated to Azure, its revenue growth could exceed 40%. The company expects capex to decline sequentially in 3QFY26 due to normal variability in cloud infrastructure buildouts and the timing of finance lease deliveries.

PBP Business Performance

The PBP segment, which accounts for 42.0% of total revenue, saw a 15.9% YoY increase in revenue, driven by a 6% YoY growth in paid M365 commercial seats and ARPU expansion. Microsoft 365 Copilot's daily active users (DAUs) increased by 10 times YoY, and paid Copilot seats reached 15 million in 2QFY26.

Financial Performance

• Gross Profit Margin (GPM): Shrank by 0.7 ppts YoY to 68.0%, due to continued investment in AI infrastructure and product usage.
• Operating Profit Margin (OPM): Increased by 1.6 ppts YoY to 47.1%, surpassing the consensus estimate of 45.5%, driven by a 3.0 ppts margin expansion in PBP, though this was partly offset by a 0.3 ppts decline in IC.
• Net Profit Margin (NPM): Increased by 11.1 ppts YoY to 47.3%.

Forecast and Valuation

CMBIGM has maintained its FY26–28E operating profit forecast but lowered the DCF-based target price by 3% to $614.60 from $636.30, due to an increased capex forecast. This translates to a 35x/31x P/E ratio for FY26E/FY27E. The target price is based on the FY26E forecast, and the company maintains a BUY rating, believing its long-term structural growth story remains unchanged.

Shareholding and Market Data

• Market Cap: $3,591,592.8 million
• Average 3-month Trading Value: $12,078.0 million
• 52-week High/Low: $542.07 / $354.56
• Total Issued Shares: 7,457.2 million
• Shareholding Structure:
  • Vanguard Group: 9.4%
  • Blackrock: 8.0%

Share Performance

• 1-month: -1.1% (Absolute) / -2.7% (Relative)
• 3-month: -11.1% (Absolute) / -10.7% (Relative)
• 6-month: -6.0% (Absolute) / -16.9% (Relative)

Earnings Summary

Changes in Forecast and Valuation

Valuation Metrics

• P/E (2026E): 27.7
• P/E (Diluted): 27.7
• P/B: 8.3
• P/CFPS: 156.6

Risk Factors

• Slower-than-expected margin expansion
• Slower-than-expected ramp-up in revenue contribution from AI-related services

Analyst Certification

The research analyst certifies that all views expressed in this report reflect his or her personal views and that no part of his or her compensation is directly or indirectly related to the specific views in this report. The analyst also confirms that he or she has not traded in the stocks covered in this report within 30 days prior to the report's issuance and will not do so within 3 days after issuance.

CMBIGM Ratings

• BUY: Stock with potential return of over 15% over the next 12 months
• HOLD: Stock with potential return of +15% to -10% over the next 12 months
• SELL: Stock with potential loss of over 10% over the next 12 months
• NOT RATED: Stock not rated by CMBIGM
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
• MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
• UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark

Important Disclosures

• This report is not an offer or solicitation to buy or sell any security
• CMBIGM does not provide individually tailored investment advice
• The value of investments is uncertain and may fluctuate
• The report is based on analyses of publicly available information
• CMBIGM is not liable for any loss, damage, or expense incurred from relying on this report

Conclusion

Microsoft's 2QFY26 results showed strong performance, with revenue and operating income both exceeding expectations. The company's long-term structural growth story remains intact, supported by robust commercial RPO balance and expanding ARPU in the PBP segment. Despite a slight drop in GPM, OPM and NPM showed improvement. The BUY rating is maintained due to the continued growth trajectory and the company's strategic investments in AI and cloud infrastructure.