Is MSFT a good stock to buy? We came across a bullish thesis on Microsoft Corporation on Nikhs’s Substack. In this article, we will summarize the bulls’ thesis on MSFT. Microsoft Corporation’s share was trading at $408.96 as of March 6th. MSFT’s trailing and forward P/E were 25.59 and 21.41, respectively according to Yahoo Finance.
Microsoft Corporation develops and supports software, services, devices, and solutions worldwide. MSFT Q2 FY26 results underscore a strategic pivot that could redefine enterprise AI governance and create a durable moat. The company is betting that the true value in AI lies not in where models run, but in how access, identity, and permissions are controlled. Its newly launched Agent 365 layer extends governance across any cloud, ensuring autonomous agents authenticate through Microsoft’s control plane.
This mirrors the success of Active Directory decades ago, where Microsoft captured value at the identity layer despite heterogeneous applications. With $625 billion in backlog, including $250 billion from OpenAI, enterprises are pre-committing to governed AI environments, validating that control commands a premium even as compute and models commoditize.
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Microsoft’s allocation of GPU capacity prioritizing M365 Copilot and GitHub Copilot over raw Azure growth demonstrates its focus on long-term integration and Work IQ accumulation. Copilot interactions strengthen Microsoft’s enterprise context layer, which becomes the foundation for Agent 365’s governance, capturing the “control premium.” While competitors like Claude Code threaten product leadership at the developer layer, Microsoft’s Cockpit strategy—governance, identity, and audit—remains portable and critical, suggesting the company can capture outsized value even if infrastructure and model layers are multi-sourced.
The bullish case hinges on several factors: widespread enterprise adoption of Agent 365 akin to Active Directory, non-OpenAI backlog growth sustaining above 25%, M365 Copilot penetration exceeding 50 million seats, and GitHub maintaining strategic relevance. If successful, Microsoft could dominate enterprise AI governance, turning autonomous agent proliferation from a risk into a moat, while preserving high-margin revenue streams and a long-term competitive advantage. With governance becoming the chokepoint, MSFT’s integrated control layer positions it for outsized upside despite tactical challenges in compute and developer tools.
Previously, we covered a bullish thesis on Microsoft Corporation (MSFT) by Ray Myers in May 2025, which highlighted the company’s leadership in enterprise software, cloud computing, gaming, and AI integration driving long-term growth. MSFT’s stock price has depreciated by approximately 9.74% since our coverage. Nikhs shares a similar view but emphasizes Microsoft’s strategic pivot toward enterprise AI governance with Agent 365, capturing the control premium through identity, permissions, and audit across any cloud.
Microsoft Corporation is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 312 hedge fund portfolios held MSFT at the end of the fourth quarter which was 312 in the previous quarter. While we acknowledge the risk and potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
