微软2026财年第四季度：突破而非停滞

+1917344 8506mark.moerdler@bernsteinsg.com +19173448316firoz.vallj@bernsteinsg.com +1917344 8342shelly.tang@bernsteinsg.com Microsoft 4Q26: Breakout !!! not stagnation. Two quarters ago wewrote a Notedetailing how Microsoft was adding significant capacity(insteadCopilotpaidseatsgrew33%QoQ)wecontinuedtobelieveitwouldhappenanddetailed the modeling that validates this belief in our Microsoft 4Q26 preview:Stagnationor breakout?.Microsoft deliveredthisquarterwith Azure growth beating consensus (43%vs consensus of 41%),and guide forfurther Azure acceleration (45% vs consensus 41%);Copilotpaid seat acceleration(50%QoQgrowth),stableCAPEXgrowth anda cleanquarter. While the stock has positively reacted 9% in the after market we believe that Microsoftisproving they are an Al winner with strong downside protection and further improvementahead. Given the quality of the stock and low valuation we believe this is a stock investorsshould own.We strongly reiterate our Outperform rating. InvestmentImplicationsMicrosoft (MSFT,$647TP,Outperform)deliveredwhatwe believe are the three main data points that investors haveneeded to see to become more constructive on the company:1)Azure revenueto acceleratemeaningfully(43% inQ4 and45% guide forQ1);2)CAPEXgrowth to be stable as Azure accelerates; and3)strong Copilot adoption.Even with themoveweexpectwhenthemarketopenswecontinuetobelievethestockisundervaluedwhenoneconsiders 1)MSFT's abilityto deliver stable GAAP margins inthemid4Os and 2)downsiderisk protection. Even if we see some bubble like behavior in parts of Al, this is a stock that$646to$647as weroll forwardour estimates and lowerourvaluationmultiplefrom29xto26.5x,to reflect peer step-down in peer group valuation. expectations and valuation lowand signsof CAPEX slowingand Azure accelerating while Copilotadoption strong.Giventherisk/reward one should start to rebuild one's Microsoft position overtheremainder of the yearQ4 delivered on this andmore.Microsoft beat on everymetric (Exhibit 2)and management gave very strong guidance driving the stock up~9% in theaftermarket Copilot strengthand CAPEX stability.This quarter's results and guidance were broadly consistent with those expectationsThere were 4 majorfactors, we believe that influenced the stock price and sets the valuation to continue to improve: the Q4/Q1Azureacceleration in our recentnote (Microsoft: Could the bear case in fact be the bullcase?),it justtook twoquarters longerthan wehad expected. CAPEX:Webelievethatthe street expectedmanagementto raise their190BCY26guidance but infactthey nominallylowered the guidance to 175B.The change was driven by a change in theuseful life of datacenterfacilities but thefact thatmanagementdidnotraiseguidancewhileguidingAzuregrowth(andCopilotseats)aboveexpectationswasa“Onetwopunch"to the bears. ADDITIONALTHOUGHTSONTHEQUARTERANDTHEGUIDE Microsoft earnings always have a lot to unpack.But in some ways this quarterthere were a lot of interesting data points, beyondthose touched above and information that is worth noting. RemainingFcF positive inFY27:Management gave a fascinating and informative commentduring the call"...weexpectto remain free cash flow positive in FY27" While many of Microsoft's hyperscaler peers have turned FCF negative and somehaveraised debt and/or sold equity,Microsoft has setthetone that there is a limitto how large cash CAPEXwill be nextyearand how their cash generating capabilities will be strong. Increasing the useful life of datacenters: Microsofthas increasedthe useful life of their datacenters from 15years to 25years.This allows the companyto recognize some shorter duration financing leases as operating leases, decreasing non-cash CAPEX,and lower slightly operating and free cash flow.It also should allowMicrosoftto amortize the datacenters theybuild over a longer period of time. We discuss this in more detail later in the note. :The decrease in the company's CAPEX from 190B to 175B was driven by this change in theuseful life and not byachange inthe quantityorunit cost ofhardware,equipment or datacenterfacilities.Withoutthis changemanagement wasreiteratingtheirFYguidance. :Whilethis hasan impactonthenumbers,especiallydecreasingCAPEX,webelievethatmany investors hadbeenexpecting until very recentlymanagement to increase the CAPEX number.Thus,part of what drovethe stockreactionwas the factthatCAPEX could beconsidered asflat whileAzuregrowthaccelerated and will acceleratenextquarter : Microsoft has built the business for the broadest flexibility to manage to supply and demand: Managing the supply/demandconcerns:Management,answering our question explained that while currently demandstop) ordering hardware, which is the largest component of their CAPEX and the cost of Cloud / Al. They can also delaythe building of datacenters tomanage capacity.They also explained that it iskey to havethe broadest range of customertypes, segments, product offerings (1st party and 3rd party, Azure and SaaS), and geos. w