“Magnificent Seven” is the name given to apple, Microsoft (msft -1.13%)), nvidia, Amazon, alphabet, Meta Platformand Tesla Due to the impact on the market over the past few years. Unfortunately, “The Magnificent Seven” has not been that grand for the past few weeks, and not all from the year to the seventh year.
There are various reasons for their individual struggles, but after President Donald Trump’s new tariff plan was announced, they experienced collective decline.
Having an epic 7 stock slump is not ideal as it occupys many major indexes (particularly S&P 500), but it presents investors with a good opportunity to buy a great company at a “discount” price.
Of all the 7 epic stocks that have been slumped, Microsoft regrets not buying them at the current price. Let’s see why.
How new tariffs will affect Microsoft’s business
First, let’s talk about the potential impact of tariffs on Microsoft’s business.
Like many other large tech companies, Microsoft relies heavily on imported electronic components and raw materials. This applies to the appliances and data centers that need to run the cloud platform Azure. These data centers require networking equipment, servers and other equipment that Miksoft imports from countries such as China, Korea, and Taiwan.
These parts are likely to be more expensive, and Microsoft offers three options: Pass costs to customers, absorb additional costs, delay or cancel your data center expansion plan.
Even before the tariff announcement, choosing that route is not overstated as Microsoft has been pulled back from several data center expansion plans in the US and Europe. If you decide to absorb a higher cost, that profit margin gives you a breathing chamber to determine a better long term option.
MSFT profit margin (quarterly) Data based on data YCHARTS
Microsoft Azure is Microsoft’s growth engine
Because of how important Azure is to business growth, we focused on increasing costs compared to Microsoft’s data centers.
In the second quarter of 2025, Microsoft’s intelligent crowd segment (including Azure) generated $25.5 billion in revenue. This is an increase of 19% year-on-year, exceeding 36% of Microsoft’s total revenue.
Azure is firmly in second place in cloud services market share, followed by Amazon Web Services (AWS), but its growth is impressive. While we won’t be passing AWS on market share anytime soon, it emphasizes how competitiveness has become a cloud platform.
The cloud services industry remains relatively young and there is far more room for expansion as businesses move more businesses to the cloud. When this happens, Azure should continue to drive the growth of many of Microsoft.
Microsoft’s business is the most recession-resistant of the grand Seven
Over the decades, Microsoft has created the most thorough ecosystem in the world of big technology. It includes consumer and enterprise electronics, consumer and enterprise software, cloud services, social media, and games.
When the economy hits a rough patch, you want to invest in a business that can generate consistent and repetitive revenues, and Microsoft has it. But more importantly, the number of companies and corporate clients Microsoft has.
Companies are less likely to cut spending on critical software and electronic devices than everyday consumers who may be required to pay cash. This will help keep Microsoft’s finances consistent, even if there is a pullback in spending. That doesn’t mean that Microsoft doesn’t see a slight slowdown, but its revenues are more stable and predictable. It is especially predictable in the long term.
MSFT revenue (quarterly) Data based on data YCHARTS
Don’t forget Microsoft dividends
People rarely look at Microsoft and think about its dividends, but they’ve paid it since 2003. Since then, Microsoft’s stock price has been rising, so dividend yields have generally been low, but the company has shown that dividends are made into points of sale to investors.
Microsoft has increased its annual dividend for the 23rd year in a row, up over 160% over the past 10 years.
MSFT dividend Data based on data YCHARTS
With yields below 1%, Microsoft’s dividends are not surprising. Still, it can have a significant impact on your total revenue in the long term. Over the past decade, Microsoft’s stock price has increased by around 810%, with its total return rate at around 960% (as of April 16th). That’s a noticeable difference.
Combining the dividend with Microsoft Stock’s growth potential gives investors a true 2-to-1 advantage.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Randi Zuckerberg, a former director of market development, Facebook spokeswoman and sister to Metaplatform CEO Mark Zuckerberg, is a member of Motley Fool’s board of directors. Stefon Walters has jobs at Apple and Microsoft. Motley Fool has posted and recommended positions on Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
