MSFTBULLISH

MSFT Gross Margin Analysis

67.2%

Higher than 53% of Technology sector peers

Updated 81h ago·SEC filings & market data

Key Takeaway

Gross margin is the share of revenue left after paying the direct costs of producing software and services, so 67.2% means Microsoft keeps $0.672 from each dollar of sales before other expenses.

Sector Performance

53th percentile

MSFT

67.2%

Sector Median

66.3%

Sector Avg

62.2%

Prior Period

67.6%(Apr 2026)

→ Stable

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Deep Analysis

Gross margin is the share of revenue left after paying the direct costs of producing software and services, so 67.2% means Microsoft keeps $0.672 from each dollar of sales before other expenses.

That level sits slightly above the sector median of 66.4%, placing it at the 53rd percentile among technology peers—essentially in line with the middle of the pack. However, the trend data is N/A: both the year-over-year change and quarter-over-quarter change are listed as N/A, and there are no historical values beyond the current 67.2% to assess momentum. With a solid but unremarkable margin level and no visible trend, the main investment takeaway is that profitability is stable but offers no clear upward catalyst from this metric alone. This neither adds risk nor signals an opportunity beyond what the current level already implies—it is a neutral factor in the investment case. That neutrality still supports the overall BULLISH verdict, because the margin is healthy and above the sector midpoint, meaning Microsoft’s core economics are not a drag on the stock’s positive outlook. The metric does not contradict the bullish stance, but it also does not provide the momentum boost that a rising margin would.

Frequently Asked Questions

What does the Gross Margin tell investors about MSFT?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does MSFT's Gross Margin compare to its sector?

MSFT's Gross Margin of 67.2% compares to a Technology sector median of 66.3%, placing it in the 53th percentile.

Who are MSFT's closest peers by Gross Margin?

The closest Technology peers by Gross Margin include: MDB (72.2%), NVDA (74.9%), CRWD (75.3%), ESTC (75.4%), CRM (76.9%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.