What Could Really Power Microsoft Stock Higher From Here?

What looks like another AI product is actually a fundamental and potentially lucrative shift in how the company makes its money.

For a company at the center of the AI universe, Microsoft (MSFT) stock has been surprisingly earthbound lately. It’s down about 20% over the past year and trades 28% below its 52-week high. With so much attention on new features, you might be wondering what could actually provide the fuel for a sustained climb from here.

The answer lies in a quiet but profound shift in the company’s entire business model, one that could unlock a new layer of growth on top of its substantial existing customer base.

The New Engine: A “Per User and Usage” Business

For decades, Microsoft sold you software. Now, it’s moving to a model where it sells you outcomes. The company’s own management describes the transformation as moving to a “per user and usage business.” Think about that. It’s one thing to sell a subscription for access to a tool; it’s another thing entirely to get paid for every single task that tool performs. The goal extends beyond simply adding more seats to capturing a fraction of the value from the billions of queries, reports, and summaries its AI agents will run. This model, if successful, could fundamentally re-rate what each of Microsoft’s hundreds of millions of users is worth.

Is anyone actually paying for this?

A great strategy is one thing, but execution is another. The early evidence for this new model comes from the front lines of its AI push: Microsoft 365 Copilot. The company now has “over 20 million Microsoft 365 Copilot paid seats,” a number that’s accelerating. In the most recent quarter, seat additions increased 250% year-over-year, representing the fastest growth since the product’s launch. This isn’t a hypothetical; it’s a real, paying customer base that is rapidly adopting the very consumption-based products that represent the company’s future. We have also explored how this could impact the stock’s valuation. If you’d rather own the whole technology space than bet on a single giant, a technology ETF like VGT holds Microsoft among its largest positions.

The Price Tag Is $190 Billion

Microsoft is backing this strategic shift with an immense amount of capital. The company expects to invest roughly $190 billion in capital expenditures in calendar year 2026 alone. That significant figure is allocated for building the global engine required to power all that new, paid usage, a task that goes far beyond constructing more data centers. The company has been clear that even with this spending, strong customer demand continues to exceed available capacity. It’s a classic growth story: invest heavily to meet overwhelming demand that you can directly monetize. This spending is the clearest signal of management’s conviction in the per-user, per-usage future.

Microsoft is undertaking more than another product cycle; the company is attempting to rewire its entire commercial relationship with its customers. The bet is that by embedding AI agents into the daily workflow of nearly every office worker on the planet, it can create a new, durable, and high-margin revenue stream that compounds for years to come. The pieces are in place, the spending is committed, and the first wave of customers is already paying up.

Where Does An Opportunity Like This Show Up First?

An opportunity like this only counts once it starts showing up in the numbers, and the first hard place it surfaces is management’s guidance. The moment a company can actually see the new revenue coming, it raises its forecast, and a raised forecast that the market is already rewarding is about the cleanest proof that a story like this is turning real. Federal Realty Investment Trust (FRT), Fortinet (FTNT), and GE Vernova (GEV) are flashing exactly that signal right now. Our Guidance Momentum screen tracks every S&P 500 name where a rising forecast is already meeting real price momentum, so you can hunt for the next opportunity like this one while it is still early. And if you would rather own the whole theme than bet on this one name, a technology ETF like VGT holds the entire group.

What Is The Smart Way To Back A Story Like This?

A growth story this credible is worth acting on, but acting on it through one stock means accepting every bump that one company hits along the way. The smarter route is to hold a basket of names where the long-term case is this strong, so the durable upside stays and no single surprise can undo it. That is how patient money compounds.

Sorting the genuinely durable stories from the merely exciting ones is what the Trefis methodology is built for. The Trefis High Quality (HQ) Portfolio weighs the full picture of quality across thousands of names, not a single driver, holds the 30 strongest, and rebalances them with discipline. It has a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.