Analyst Says Microsoft (MSFT) at ‘Intersection’ of Software and AI

We recently published Top 9 AI and Non-Tech Stocks to Watch Amid Latest Earnings Season. Microsoft Corporation (NASDAQ:MSFT) is one of the top AI and non-tech stocks.

Richard Saperstein from Treasury Partners said in a recent program on CNBC before Microsoft’s latest earnings report that he believed the company would be able to achieve mid-30% Azure growth.

“Right, it’s just continuous to add to the value of Microsoft, another 135 billion added today, and it’s consistent with Microsoft being the intersection of software and AI. They’ve been growing at 33%. I think analysts are looking for mid-30 type growth, and we expect them to achieve that.”

Microsoft posted a strong quarter recently and blew past analyst estimates for Azure with 40% year-over-year growth. What rattled investors was its CapEX, which soared to about $35 billion in the September quarter,  most of which went to Nvidia chips to solve capacity bottlenecks in its cloud business. The CapEx figure was much higher than the Street’s forecast of about $30.34 billion.

Photo by Microsoft Edge on Unsplash

Wedgewood Partners stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its third quarter 2025 investor letter:

“Microsoft Corporation (NASDAQ:MSFT) has also spent quite heavily on capex over the past several years, having stood up more than 2 gigawatts of data center capacity over the past 12 months alone, yet it has also produced very attractive cash low returns. It exited its fiscal 2025 with almost $370 billion in gross property plant and equipment and capitalized leases, up a remarkable $260 billion from fiscal 2020. Meanwhile, gross cash low grew from $60 billion a year in 2020 to more than $140 billion per year in 2025. When we add in the rest of the assets on Microsoft’s balance sheet, we calculate its gross cash lows to be a consistent returns on capital in the high 20s. That is an extraordinary attractive return for such massive amounts of investing.”

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Disclosure: None. This article is originally published at Insider Monkey.