Among the day’s most active stocks, major names like Nvidia, Tesla, Apple, Amazon, and Microsoft often dominate. However, if I were to select one stock to hold for the next five years, it would be Microsoft. My choice is based on the underlying fundamentals of the company rather than the volume of daily trading.
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Microsoft averages about 27 million shares traded each day, according to Yahoo! Finance. Though this figure represents significant activity, it pales in comparison to some of its competitors. For instance, Nvidia averages over 120 million shares, Tesla around 41 million, and Apple roughly 55 million. These stocks frequently appear on most active lists due to their status as mega-cap companies present in nearly all major index funds and ETFs. As a result, any capital inflow or outflow in the S&P 500 or Nasdaq affects them all, including Microsoft.
When considering a long-term investment, I prioritize a company capable of translating trading activity into sustained cash flow. In its latest quarter, fiscal Q4 2026, Microsoft reported revenues of $90 billion—an 18% increase year-over-year—while Microsoft Cloud revenue surged 27% to $59.3 billion. Azure, the company's primary cloud platform, experienced a 43% growth, beating analyst expectations as more businesses integrated AI workloads into their pre-existing infrastructure on Microsoft’s servers. For the entire fiscal year, Azure generated over $100 billion in revenue for the first time, achieving a 41% increase, and total Microsoft Cloud revenue exceeded $214 billion. These metrics reveal the robust business performance standing behind the stock.
Microsoft distinguishes itself through its significant investments in AI and cloud technologies. The company has guided capital expenditures to approximately $175 billion for calendar 2026, a revision down from an initial estimate of $190 billion due to updated accounting for owned versus leased data centers. In the most recent quarter, capital expenditures and finance leases reached $41 billion, marking a 69% year-over-year increase, as CFO Amy Hood confirmed on the earnings call. This substantial investment, aimed at GPUs, data centers, and the infrastructure needed for AI workloads, reflects the demand in the market.
Microsoft's AI segment now boasts an annual revenue run rate exceeding $37 billion, a 123% increase from the previous year, as companies incorporate its models into products such as Office and GitHub's developer tools. Commercial bookings grew 18% even after excluding the impact of its partnership with OpenAI, while commercial remaining performance obligations—representing revenue already contracted but not yet recognized—expanded 84% to $678 billion. Even without considering OpenAI, this backlog grew by 25%, indicating that a diverse array of customers is signing multiyear agreements with Microsoft, with about 30% of this backlog expected to convert into revenue in the coming year.
In summary, trading volume reflects the level of attention a stock receives but does not determine its long-term value. Microsoft’s reported capex reduction is more about how costs are spread over time rather than a decrease in actual spending. While there are concerns regarding AI-related overinvestment, Azure’s growth outpacing the broader market and the substantial contracted backlog provide a strong foundation for future growth.
For these reasons, I believe focusing on Microsoft rather than daily trading volume is prudent. Despite the stock’s fluctuations driven by traders, the company possesses a solid revenue stream and a backlog that many firms would envy.