A more accommodative Federal Reserve is a tailwind for Microsoft: lower interest rates stimulate enterprise capex, particularly in cloud and AI, where Azure is projected to surpass $120 billion in annual revenue by 2026. Microsoft’s diversified growth drivers, including LinkedIn’s 20% revenue increase and Xbox’s expanding Game Pass subscriber base (over 35 million), enhance its appeal. With a forward P/E of 32x, slightly below tech peers, and a history of beating earnings estimates in 90% of quarters since 2020, Microsoft offers a compelling 20%+ upside for investors entering at current levels.
