Microsoft (MSFT) Attracts Billionaire Tom Steyer's Continued Confidence as AI Revenue Hits $37 Billion Run-Rate – foreignpolicyjournal.com

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By Timothy Mason | May 3, 2026 | Economy & Business, Featured, News & Analysis

Microsoft Corporation (MSFT) ranks among the long-term conviction positions of billionaire investor Tom Steyer, whose fund has maintained a position in the stock with only a brief interruption across a span stretching back to 2010.
The most recent filings for the fourth quarter of 2025 show the fund holding 2.2 million shares, representing a 15 percent increase compared to the prior quarter, a meaningful lift in a position that Steyer has managed with careful sizing over multiple market cycles. The renewed enthusiasm comes at a moment when Microsoft’s underlying AI fundamentals are producing numbers that were difficult to forecast even 18 months ago.
Microsoft’s most recent quarterly results revealed that AI-related revenue across the company has reached an annual run-rate of $37 billion, a 123 percent increase year on year. That figure is the clearest evidence yet that Microsoft’s AI strategy, built around deep integration with OpenAI models and the rapid expansion of Azure’s AI services, is converting into durable, high-margin recurring revenue rather than simply generating headline excitement without commercial follow-through. CEO Satya Nadella confirmed during the earnings call that Microsoft added one full gigawatt of data centre capacity in the most recent quarter alone, and that the company is on track to double its overall computing footprint within two years.
Azure and other cloud services grew 40 percent in the latest quarter, a figure that significantly outperformed analyst expectations and reinforced Microsoft’s position as one of the primary infrastructure beneficiaries of enterprise AI adoption. The cloud segment growth is particularly meaningful because it suggests that AI workloads are being run at scale on Azure rather than on competing platforms, a critical validation of the company’s decision to build such deep integration between its AI capabilities and its cloud computing offerings. Over 20 million paid Copilot users are now active across Microsoft’s product suite, demonstrating that the company is converting its enormous installed user base into premium AI subscriptions.
Steyer’s fund first opened a position in Microsoft in the fourth quarter of 2010, initially holding just under 2.3 million shares before growing that stake to over 4.5 million shares by the third quarter of 2011. The position was sold off by mid-2012, before being reopened in the third quarter of 2013 with 3.8 million shares. Since that re-entry, the fund has maintained consistent exposure to the stock through multiple market cycles, reductions, and rebuilds, a pattern that reflects a conviction about Microsoft’s long-term platform dominance rather than a trading orientation. The current 15 percent increase in share count during Q4 2025 adds to that narrative.
What makes this moment particularly interesting for Microsoft’s stock is the combination of accelerating AI revenue, continued Azure outperformance, and growing evidence that the capital expenditure cycle required to support AI infrastructure is producing returns faster than the market had feared. The decision by Nadella to commit to adding a gigawatt of compute capacity per quarter is not a cautious incremental step. It is an aggressive declaration that Microsoft believes the AI demand cycle is real, sustained, and worth the capital commitment required to capture it. Whether the market continues to reward that confidence will depend on whether AI revenue continues to accelerate at the current pace.
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Timothy Mason is a senior reporter at the Foreign Policy Journal, covering current affairs and business news. He studied Economics at the University of Michigan and has worked as a journalist for over seven years.
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