Microsoft develops software, devices, and cloud services. Windows is an operating system that runs on personal computers, Office provides productivity apps, and Azure offers cloud computing and developer tools. The company differentiates itself with a large, integrated ecosystem of software, devices, and services, plus long-standing partnerships with PC makers and a broad enterprise footprint. Its goal is to put a computer on every desk and in every home, and to extend that reach through cloud services, professional networking (LinkedIn), and gaming.
Company Size
10,001+
Company Stage
IPO
Headquarters
Redmond, Washington
Founded
1975
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Microsoft CEO Satya Nadella is set to attend a White House state dinner honouring Chinese President Xi Jinping on 24 September, alongside leaders from Apple, OpenAI, and Nvidia, according to Bloomberg. The event comes as Microsoft posted record fiscal 2026 results, with annual revenue topping $331 billion, up 18%. Azure crossed the $100 billion mark with 41% annual growth, whilst CFO Amy Hood noted demand continues to exceed available supply. Microsoft 365 Copilot paid seats surpassed 30 million, with quarterly additions more than doubling. Nadella has emphasised AI sovereignty as a key theme, with companies and countries seeking control over their data and models. Microsoft now supports over 11,000 models across its Azure platform and has expanded its Sovereign Cloud partnerships.
Microsoft has opened a quantum computing research centre in Maryland, giving the US Defense Advanced Research Projects Agency direct access to its latest quantum hardware for independent testing. The facility, located at the University of Maryland's Discovery District near Washington, houses a quantum system using Microsoft's Majorana 2 chip. Previously, DARPA evaluated Microsoft's technology remotely from machines in Redmond and Europe. The new arrangement allows DARPA experts physical access to load hardware and run their own tests. DARPA is evaluating multiple quantum firms to determine whether any approach can yield economically feasible systems by 2033. The system in Maryland will be built to accommodate future chips Microsoft is developing. Microsoft plans to have commercial quantum systems ready by 2029.
BNP Paribas suggests Microsoft could see additional Azure growth through higher pricing as customer contracts renew. Analyst Stefan Slowinski noted that Microsoft executives acknowledged pricing increases, though existing contracts won't be rewritten. The pricing will reset upon renewal, meaning benefits should appear gradually rather than creating immediate growth acceleration. Microsoft's recent Azure acceleration into the mid-40% growth range hasn't been materially driven by pricing, according to the company. Instead, fleet-level efficiency improvements and capacity additions remain the main contributors. Slowinski maintains a Buy rating with a $549 price target on Microsoft. He also highlighted a potential SpaceX cloud-computing deal as a future catalyst, noting SpaceX recently disclosed a new compute customer expected to spend roughly $1 billion monthly starting in December.
Microsoft disclosed in its fiscal 2026 annual report that OpenAI generated $24.1 billion in revenue, representing about 7% of Microsoft's total $331.8 billion revenue for the year ended 30 June. OpenAI owed Microsoft $6.0 billion at year-end. The $24.1 billion includes revenue-sharing payments and Azure computing services, though the filing doesn't break down the split. OpenAI's arrangements equalled roughly a quarter of Azure's $100 billion revenue, which grew 41% year-over-year. The concentration is even more pronounced in Microsoft's backlog. The company's $678 billion in commercial remaining performance obligations grew 84% year-over-year. Excluding OpenAI, CFO Amy Hood said that backlog grew only 25%, meaning most contracted future revenue growth comes from OpenAI. Microsoft owns a stake in OpenAI large enough to classify it as a related party under accounting rules.
Microsoft has raised its quarterly dividend to $0.98 per share from $0.91, marking an 8% increase and extending its dividend-growth streak to 23 consecutive years. The new dividend is payable on 10 December to shareholders of record as of 19 November. At the current stock price, the annual dividend of $3.92 per share translates to a yield of roughly 0.8%. The company generated $182.9 billion in operating cash flow in fiscal 2026 and returned more than $43 billion to shareholders through dividends and buybacks. However, Microsoft's massive AI infrastructure spending is putting pressure on free cash flow. Capital expenditures reached $41 billion in the June quarter, with first-quarter fiscal 2027 spending expected to exceed $50 billion. This heavy investment could moderate future dividend growth.