Microsoft Stock Stalls as Backlog Meets Lower Yields

Microsoft (NASDAQ: MSFT) saw its shares edge up less than 0.1% on Tuesday morning, as declining Treasury yields offered some support to the broader market. While the company reported an 18% increase in fiscal fourth-quarter revenue to $90 billion, driven by 43% Azure growth and a 27% rise in Microsoft Cloud revenue, the market's attention is fixed on its substantial backlog. Commercial remaining performance obligations surged 84% to $678 billion, highlighting strong demand but posing a challenge for profitable conversion amidst heavy AI spending. The stock currently trades 15.81% below its GF Value estimate, suggesting potential upside if Microsoft can effectively manage its capital commitments and demonstrate attractive future returns.

### Story Arc / How We Got Here

This follows our earlier coverage ([Palantir, Microsoft Highlight Q2 Earnings Strength](/explore/palantir-microsoft-highlight-q2-earnings-strength)) on 2026-08-17. Palantir and Microsoft are among the standout performers as the second quarter earnings season draws to a close, signaling robust growth across the technology sector. Their results underscore the ongoing strength observed throughout the reporting period. Investors are watching these tech giants for continued momentum. · - Palantir (PLTR) and Microsoft ($MSFT+WL) are highlighted as standouts in the Q2 earnings season, indicating broader sector strength. Investors are monitoring these companies for continued performance trends.