Microsoft’s Bond Issuance is Textbook Structural Strategy So I Buy, Not Panic
When Microsoft announced its first major US bond sale in years, nervous investors saw red flags. I saw a company with $677 billion in signed contracts and not enough capacity to fill them, so I opened my brokerage app and…
I bought more Microsoft (NASDAQ:MSFT | MSFT Price Prediction) after its latest earnings report. Then reports came up that Microsoft was planning its first US investment-grade bond sale in years, and I bought again. The bond news concerned some investors. I see a company with a very strong balance sheet raising money to build faster because customers want more than it can supply.
Why This Debt Makes Sense to Me
Microsoft sells the infrastructure enterprises need to run AI, and customers have already signed multiyear contracts for it. Commercial remaining performance obligations, or contracted revenue Microsoft has yet to recognize, reached $677.00 billion, up 73% year over year. Satya Nadella told analysts that “customer demand continues to exceed available supply.” With that much demand already under contract, borrowing to add capacity sooner looks like sound planning to me.
Microsoft’s...