Author argues Microsoft's 20% revenue share from OpenAI makes MSFT attractive even if OpenAI remains unprofitable, since revenue is captured before OpenAI's costs.
MSFT — LONG Author argues Microsoft's entitlement to 20% of OpenAI's revenue means MSFT captures cash before OpenAI's heavy COGS, cloud, R&D and operating expenses, so OpenAI's unprofitability matters less to Microsoft than commonly assumed. Microsoft also owns 27% equity in OpenAI, is its primary Azure cloud provider, holds IP/API rights, and OpenAI is committed to spending $250B in Azure, reinforcing the core business. The stated risk is that if OpenAI fails or deteriorates, MSFT's large equity stake suffers, though the author says this does not affect Microsoft's core high-margin, moated business. Time horizon unspecified.
Which is why it is essential Microsoft is entitled to 20% of OpenAI's revenue. Even if OpenAI is laughably unprofitable, Microsoft gets a whole bunch of their revenue before all the expenses.
This Reddit post, published February 26, 2026, features u/Low_Selection2815 discussing MSFT. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: u/Low_Selection2815 · Tickers: MSFT