Contents
Key Takeaways
- Under a restructured agreement, Microsoft secures 20% of OpenAI’s revenue until 2032.
- Microsoft relinquished its exclusive compute provider status — OpenAI can now partner with other cloud vendors.
- The company owns a 27% equity position in OpenAI Group PBC, currently valued at approximately $135 billion.
- MSFT shares have tumbled more than 25% from October peaks, currently trading around $397.24.
- The forward earnings multiple has dropped to 24x — the lowest level seen in almost three years.
Microsoft (MSFT) has reached its most attractive valuation in three years, even as it secures one of the tech industry’s most lucrative long-term revenue arrangements.
The tech behemoth will receive 20% of all OpenAI revenue through the end of 2032, representing an extension from the previous 2030 termination date. This restructured arrangement, finalized in the fall of 2024, redistributes certain payment obligations to future periods.
A significant modification: OpenAI has gained autonomy to engage alternative compute infrastructure providers. Microsoft has relinquished its previous first-refusal privileges in this domain.
Microsoft Claims 27% Ownership in Restructured OpenAI Entity
When OpenAI completed its transformation into a public benefit corporation structure last October, Microsoft maintained its position as a primary stakeholder.
Through this corporate restructuring, Microsoft obtained a 27% ownership stake in the newly formed OpenAI Group PBC. Current valuations place this entity at approximately $135 billion.
Microsoft retained critical advantages including exclusive intellectual property licensing and Azure API exclusivity — arrangements that remain enforceable until an independent evaluation committee verifies that artificial general intelligence has been achieved.
OpenAI Pursues $40 Billion Capital Raise for Infrastructure Expansion
OpenAI is currently seeking up to $40 billion in fresh capital to finance data center infrastructure buildout. Microsoft, Nvidia (NVDA), and Amazon (AMZN) are among the strategic investors being courted.
Negotiations with SoftBank and sovereign wealth funds from the Middle East are actively underway. The financing round is anticipated to reach closure during Q1 2026.
Regarding MSFT’s market performance, 2026 has proven challenging. The stock has declined over 25% from its October peak, settling at $397.24 on February 20 — trading within a 52-week range spanning $344.79 to $555.45.
MSFT Trading at Most Attractive Multiple in Three Years
The share price correction hasn’t coincided with fundamental business weakness. During Q2 of fiscal 2026, concluding December 31, Microsoft delivered 17% revenue expansion compared to the prior year.
Shares currently command a 24x forward earnings multiple — representing the most compressed valuation in nearly three years. For context, the S&P 500 trades at 21.9x, positioning Microsoft only marginally above the broader index on this metric.
Azure’s growth trajectory remains intact, supported by substantial committed workloads awaiting deployment. Microsoft maintains a $2.9 trillion market capitalization, operates at a 68.59% gross margin, and offers shareholders a 1.09% dividend yield.
