Jim Cramer's Microsoft (MSFT) Call: A Bullish Bet on Azure and AI Dominance

Why Microsoft's Undervalued AI Infrastructure Play Offers Contrarian Gold

Jim Cramer's recent bullish call on Microsoft (MSFT) signals a rare opportunity to buy a dominant tech titan at a discount—before the market catches up to its $13B annual AI revenue run rate and Azure's 31% YoY cloud growth. While Wall Street fixates on short-term headwinds, contrarians should see Azure's scalability and AI monetization potential as a once-in-a-decade investment thesis. Here's why MSFT is primed to outperform overhyped rivals and why now is the time to act.

Azure's Growth Metrics: A War Chest for Dominance

Microsoft's Q2 2025 earnings reveal a $25.5B Intelligent Cloud segment, up 19% YoY, with Azure and cloud services driving a staggering 31% revenue surge. This isn't just incremental growth—it's a strategic land grab in the $723B global cloud market. Azure's 20% global market share trails AWS (31%) but is growing faster, fueled by enterprise demand for hybrid cloud solutions and AI integration.

Key stats to note:
- Azure's AI revenue alone now accounts for 9% of its total revenue (up from 7% in 2024), with tools like Copilot and OpenAI partnerships driving demand.
- Microsoft's $55.7B in capital expenditures (2024) prioritized data centers and AI infrastructure—a 75% YoY increase that ensures Azure's lead in compute power.
- 347,924 global customers, including 85% of Fortune 500 companies, validate Azure's enterprise credibility.

Contrarian Opportunity: Why MSFT Is Undervalued

The stock trades at just 29x forward P/E, a stark contrast to overhyped AI startups and rivals like AWS (AMZN) at 32x P/E or Alphabet (GOOGL) at 25x P/E. Why the disconnect?

1. Near-Term Skepticism: Investors are distracted by macroeconomic uncertainty and concerns about AWS's dominance. But Azure's 175% YoY AI revenue growth and hybrid cloud strategy (used by 86% of enterprises) are underappreciated.
2. Misplaced Focus on Market Share: AWS's 31% share is a headwind, but Azure's 31% revenue growth vs. AWS's 17% highlights superior scalability. Azure isn't just catching up—it's redefining the game with AI.
3. Untapped AI Monetization: At 9% of Azure's revenue, AI is still a drop in the bucket of its $40.9B cloud business. As enterprises adopt AI for analytics, automation, and customer service, Azure's AI tools could become its new revenue engine.

Contrasting with Overhyped Rivals: Microsoft's Edge

While startups like OpenAI and Anthropic grab headlines, they lack Microsoft's end-to-end infrastructure. Azure's hybrid cloud ecosystem, SQL Server, and Windows integration give it a moat no pure-play AI firm can match.

Why Azure wins:
- Enterprise Trust: 85% of Fortune 500 companies use Azure, relying on its security and reliability.
- AI as a Service: Azure's Copilot and OpenAI integrations offer enterprises plug-and-play AI, not just research toys.
- Global Reach: Azure's customer base spans 135K+ in EMEA and 132K in North America, with Asia-Pacific growing fast.

Scalability & AI Monetization: The $13B Run Rate Is Just the Start

Microsoft's $13B annual AI run rate is a fraction of its total cloud revenue—meaning massive upside as AI adoption soars. Consider:
- Cost Efficiency: Azure's AI tools reduce enterprise spending on legacy software, making it a strategic necessity, not a luxury.
- AI-Driven Pricing Power: As Azure monetizes AI at scale, its margins could expand further, boosting EPS.

Call to Action: Buy MSFT Dips—Now

The market is missing Azure's compound growth engine: 31% cloud growth + 175% AI growth + $55B in strategic capex. With a 29x P/E and $300+ stock price, MSFT is undervalued relative to its AI-infrastructure peers.

Why act now?
- Dip Buying Opportunity: MSFT's recent pullback to $300 is a buy-the-dip moment.
- AI Adoption Surge: Enterprises will spend $723B on cloud services in 2025—Azure's hybrid/AI combo is the best-positioned play.
- Contrarian Edge: Few see Azure's AI as a $50B+ revenue driver by 2027. Be ahead of the curve.

Final Takeaway: Microsoft isn't just a cloud player—it's the AI infrastructure leader the market hasn't fully priced in. With Azure's growth and enterprise dominance, this is a decade-defining investment. Buy MSFT dips aggressively now. The AI revolution isn't just coming—it's running on Azure.

Data as of May 26, 2025.