The latest earnings reports from Microsoft (MSFT) and Shopify (SHOP) indicate that AI is not the terminator of the software industry, but rather a booster. Microsoft, with its robust cloud business growth and AI-driven efficiency improvements, has demonstrated sustained profitability; Shopify, by empowering merchants with AI tools, has secured a favorable position amid the rising trend of e-commerce penetration. Although both companies carry considerable valuations, their fundamentals are solid, and their future growth prospects remain promising.
Founded in 1975, Microsoft has faced multiple major technological transformations and industry disruptions over its decades-long history, yet has always stood firm. Historical experience shows that Microsoft has consistently succeeded in adapting and thriving through rapidly changing technology cycles, and the current AI wave is no exception.
The company’s financial performance for the fourth quarter of fiscal year 2026 (ended June 30) further confirms its business resilience. For the quarter, Microsoft’s revenue grew 18% year-over-year to USD 90.0 billion; earnings per share jumped 32% to USD 4.81. Among these, Microsoft’s cloud business performed particularly impressively, with sales revenue increasing 27% year-over-year, while the Azure cloud platform saw sales growth as high as 43%, far exceeding the level of the same period last year. Management explicitly stated that artificial intelligence was one of the key drivers behind the strong quarterly performance.
More critically, the growth momentum is expected to continue. As of the end of the reporting period, Microsoft’s cloud business backlog stood at a staggering USD 678.0 billion, up 84% year-over-year, fully demonstrating sustained strong market demand for its cloud services. At the same time, Microsoft is steadily optimizing its core business cost structure, focusing on increasing investment in self-developed AI chips rather than relying solely on external suppliers. This strategic adjustment is expected to reduce operating costs and improve profit margins and profitability.
Although some argue that Microsoft’s current stock price is on the high side—its forward price-to-earnings ratio is 25.7 times, above the information technology sector average of 21.4 times—given the accelerating Azure sales growth, the massive cloud backlog, and the potential benefits from AI-related initiatives, the company is well-positioned to maintain robust earnings growth over the next several years, thereby supporting its valuation premium. From the current perspective, Microsoft stock still holds investment value.
E-commerce service platform Shopify also delivered an impressive quarterly performance. In the second quarter, the company’s revenue surged 34% year-over-year to USD 3.6 billion; net income, excluding the impact of equity investment gains, was USD 439.0 million, up 30% from the same period last year. Meanwhile, the company’s guidance for the third quarter is equally optimistic, with revenue growth expected to remain in the low 30% range, likely continuing the growth trajectory seen in the second quarter.
Shopify specifically noted that the application of AI technology is driving more traffic to its merchants, including visits from AI-powered search channels, which directly contributed to the growth in gross merchandise volume and revenue on the platform. In addition, Shopify offers a range of AI tools—for example, AI assistants that help merchants operate their stores more efficiently and streamline daily workflows through data analysis, question answering, and performing various tasks. The company is successfully integrating AI capabilities across its platform, and investors can expect to see more such innovations in the future.
Of course, some market participants have concerns about its valuation level—Shopify’s current forward P/E ratio stands at a lofty 80.7 times. However, from a long-term return perspective, the stock still holds potential. The global e-commerce market remains vast, and Shopify currently touches only a small portion of it.
