Why Microsoft’s Cloud Migrations Matter More Than Its AI Hype
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Microsoft's stock has declined 16% YTD despite strong Q2 earnings with $50B cloud revenue and 39% Azure growth. While investors worry about AI infrastructure CapEx pressuring margins, the article argues the real value driver is steady SQL Server migrations to Azure—predictable, high-margin recurring revenue that provides a resilient foundation beneath AI investments. With $625B in RPO largely migration-tied, Microsoft's fundamentals remain solid even if AI spending pauses.
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