Microsoft's recent earnings report showed strong revenue growth, particularly in its Intelligent Cloud segment. Despite a post-earnings stock drop of 12%, the company's fundamental performance, including a strong operating income and increasing profit margins, remains robust. AI investments are a key driver, with secured contracts for GPUs and data centers. Historically, Microsoft has demonstrated consistent return on invested capital, averaging over 20% annually, and its forward P/E ratio is trading at a discount compared to its historical average and intrinsic value. While Windows OEM and Devices segment growth is modest, the overall outlook for Microsoft, especially with its AI integration, remains positive, with analysts projecting continued revenue growth and potentially higher valuations.