Microsoft remains a Strong BUY on AI edge and OpenAI deal, with Azure revenue up 40% YoY.

Microsoft is rated a Strong BUY due to its strong position in AI and strategic renegotiation of its OpenAI partnership. Its Intelligent Cloud segment, especially Azure, saw revenue grow 40% year-over-year, while paid seats for its AI tool Copilot surged 250%. The company's hybrid pricing and royalty-free access to OpenAI models support long-term margin and revenue growth. Despite high capital expenditures and cloud competition, Microsoft shows superior profitability and robust free cash flow, making it attractive compared to peers.