Many investors want to know if Microsoft can keep winning over the next few years. It is already one of the most valuable companies in the world. So how much more room is there left to grow?
To answer that, we need to look at what Microsoft is doing today, and how its financial strength is setting up for the future.
Microsoft Remains a Leader in Tech
Microsoft builds technology that the world uses every day. Windows and Office help run workplaces. Azure powers cloud software. LinkedIn connects professionals. Xbox and gaming keep growing too.
This wide range of products helps Microsoft stay strong even when the economy gets tough. Businesses can delay other spending, but not their basic tech tools.
This gives Microsoft stability that many companies do not have.
Real Growth in Revenue and Earnings
Over the last five years, Microsoft has steadily increased how much money it makes.
Revenue has grown from $143 billion in 2020 to about $294 billion today. Analysts expect it could reach more than $325 billion by 2026 if current trends continue.
Profit is also increasing. Net income has gone from $44 billion in 2020 to around $105 billion today. Forecasts show it could reach about $122 billion in 2026.
That tells us people and businesses are spending more with Microsoft each year.
Strong Cash Flow Keeps Microsoft Moving Forward
Microsoft does not just grow sales. It also turns those sales into real cash.
Free cash flow per share, money that can be used to grow the company or pay investors, has risen from $5.89 in 2020 to $10.40 today. That’s a big jump in just a few years.
This matters because strong cash flow:
- Protects the company in harder times
- Helps fund AI and cloud investments
- Supports a rising dividend
Microsoft’s dividend per share has also grown from $1.53 in 2020 to $3.40 today. Investors receive more income every year, with room for more growth ahead.
AI Makes Microsoft Even Stronger
Today, companies everywhere want AI tools. Microsoft sells those tools through products millions of people already use. Adding Copilot to Office and other services means customers pay more for technology they rely on.
That means AI can increase profits without needing new customers.
Azure also benefits because many AI programs need cloud power to run. More AI use → more cloud demand → more revenue for Microsoft.
Microsoft’s competitive position is getting stronger, not weaker.
What Risks Should You Watch?
There are always challenges to consider.
Microsoft is spending more money to build data centres for AI demand. That could temporarily reduce how much free cash is left after building costs. Regulators also watch large tech companies closely and could slow certain projects, issue large fines, or outright ban business practices in hostile jurisdictions.
And because so many investors love Microsoft, the stock price can swing quickly when the market’s mood changes. But that does not usually change the long-term story.
So, Is Microsoft a Good Investment for 2026?
Microsoft remains one of the strongest companies in global markets. Revenue is growing, profits are rising, cash flow is durable, and its leadership in AI continues to expand. Those are all qualities long-term investors should want exposure to.
But price still matters.
Microsoft’s current price-to-earnings ratio sits in the high-20s, which is expensive compared to its own history and to other mega-cap leaders with similar fundamentals. If we didn’t already hold Microsoft, purchased 18 months ago at a much more attractive valuation, it would be harder to justify initiating a new position today.
That isn’t a knock against Microsoft.
It’s simply how we invest.
We believe in buying great businesses at fair prices, not chasing growth when it becomes too expensive.
All in, Microsoft proves that earnings power matters more than hype. But discipline matters too, especially when making long-term investment decisions.