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Back of Napkin

Microsoft Corporation MSFT

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Microsoft spent $115.95B on property and equipment last fiscal year, up 80%, and its finance lease obligations grew 44% to $66.59B.

Both are how the data centres get built, and only one of them shows up when people talk about the spending.

MSFT · price with moving averages

Daily · 6MWeekly · 3Y
$287$351$414$478$542 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Microsoft sells three things. Azure and the server products around it, which is cloud computing rented by the hour. Microsoft 365, the productivity software almost every large organisation runs on, sold by subscription per employee. And a personal computing business of Windows, devices and Xbox that is now the smallest and only shrinking piece.

The company also owns a large stake in OpenAI, which has become material to reported earnings.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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