Microsoft (NASDAQ:MSFT) has been plodding along, delivering positive – though not eye-watering – returns throughout the better part of the year. While nothing to sneeze at, MSFT’s gains of some 13% year-to-date are a far cry from the incredible gains some AI-powered titans have achieved this year.
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It goes without saying that delivering huge gains becomes increasingly difficult as companies scale in size. Microsoft, with a market cap of some $3.5 trillion, certainly fits that bill.
And yet, Microsoft’s most recent quarter demonstrated that the company is doing just fine on that front. Its $77.7 billion in revenue was up 18% on a year-over-year basis, and Microsoft Cloud revenues of $49.1 billion reflected an increase of 26% from the previous year.
However, since reporting its First Quarter Fiscal Year 2026 numbers at the end of October, it has been a downhill slog for MSFT. Overall fears of an AI bubble are likely the biggest culprit for the falling share price, though Microsoft’s large capex of $34.9 billion (up 74%) probably didn’t help matters either.
Top investor James Brumley isn’t too worried, and in fact deems MSFT one of his “top stocks to double up on.”
“Microsoft may be an aging name contending with the downside of its sheer size. But this old dog’s still got plenty of fight left in it,” exclaims the 5-star investor, who is among the top 1% of stock pros covered by TipRanks.
Brumley points to the company’s strong performance last quarter, which he believes flows out of two factors that aren’t going anywhere “anytime soon… if ever.”
The first is the company’s “sheer dominance.” Microsoft’s Windows operating system currently runs on some two-thirds of global computers.
“This degree of resilient market penetration suggests Microsoft has become a permanent fixture within the personal computing landscape,” emphasizes Brumley.
This installed base of Microsoft software also creates an incredible ecosystem for the company to cross-sell its various products, which the investor lists as his second factor for Microsoft’s “enduring strength.”
While he acknowledges that MSFT hasn’t been setting the world on fire recently, Brumley urges investors to stay the course.
“Take a step back and look at the bigger picture. This is Microsoft,” concludes Brumley, who is bullish about Microsoft’s “unstoppability that comes with its sheer size and its must-have offerings.” (To watch James Brumley’s track record, click here)
Wall Street exudes confidence when it comes to Microsoft as well. With 33 Buys and 2 Holds, MSFT cruises to a Strong Buy consensus rating. Its 12-month average price target of $631.98 implies an upside north of 30%. (See MSFT stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.