Jefferies Maintains Buy on Microsoft (MSFT) Amid Strong RPO Growth and Copilot Demand

Core Viewpoint - Microsoft Corporation (NASDAQ:MSFT) is recognized as one of the best long-term investment options in the US stock market, driven by strong growth in its cloud and AI segments [1]. Group 1: Financial Performance - Microsoft reported a 26% increase in cloud revenue, reaching $49.1 billion in fiscal Q1 2026 compared to the same period last year [3]. - The company's Azure and other cloud service revenues surged by 40%, reflecting a strong customer preference for its platform [3]. Group 2: AI and Growth Strategy - The company experienced a 51% growth in Remaining Performance Obligations (RPO), indicating robust demand that has led to capacity shortages [2]. - Microsoft plans to increase its AI capacity by over 80% this year and aims to double its total data center footprint within the next two years [4]. - The adoption of Microsoft's Copilot is reported to be strong, countering negative narratives from external reports [2]. Group 3: Market Position - Microsoft has seen its stock price increase by over 15% since the beginning of 2025, showcasing its growing involvement in the AI market and its status as a leading cloud provider [3].