Microsoft Had Its Best Quarter in 28 Years. Is it Too Late to Buy the Stock?
2026-10-15 08:15
•Prosper Junior Bakiny •The Motley Fool
•••••• • Axe Cap view
Microsoft’s Record Quarter: Worth the SA Investor’s Attention?
Microsoft posted its best quarter in nearly three decades, driven by AI and cloud growth, but is the rally priced in for South African investors?
Microsoft’s recent blowout quarter confirms it’s at the forefront of the AI and cloud revolution, with 18% revenue growth and Azure surging 43%. For South African investors, the clearest local angle is through the USD/ZAR exchange rate. Strong US tech earnings often prompt a stronger rand against the dollar as global risk appetite improves and funds flow into emerging markets. That said, Microsoft trades at a forward price-to-earnings of 25.1, suggesting much of the upside might be baked in. For South African investors buying US-dollar exposure, Microsoft remains a solid growth proxy, but local JSE investors would be better off watching domestic tech-related stocks or large-dollar earners benefiting indirectly from global tech demand — like Naspers or Prosus, which have AI ambitions but face their own structural challenges at home. If US interest rates or global tech valuations falter, Microsoft’s multiples could suffer, weakening USD/ZAR. this is just our opinion and not financial advice
For direct exposure, buy Microsoft via USD ETFs or ADRs but keep exposure moderate given stretched valuations. Locally, watch Naspers and Prosus for selective AI opportunity but avoid overcommitment until their SA operations stabilize.
- MSFT
- USD/ZAR
- Naspers
- US tech valuation pullback
- Volatility in USD/ZAR from global interest rate shifts
6/10
Microsoft delivered its best quarterly performance in 28 years with 38% gains in Q3, driven by strong financial results and AI/cloud computing growth. The company's revenue grew 18% to $90 billion, Azure cloud services surged 43%, and the company ended with a massive $678 billion backlog signaling sustained demand. Despite the recent rally, analysts believe Microsoft stock remains a buy at 25.1x forward earnings due to its strong position in AI, cloud computing, and significant growth prospects.
Our take is based on reporting first published by The Motley Fool.