Important points
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The agent AI market presents significant growth opportunities for enterprise artificial intelligence (AI) infrastructure and software platforms.
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The Azure cloud, Foundry, and Fabric platforms position Microsoft across the technology stack needed to build and deploy AI agents.
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Microsoft is also seeing rapid adoption of AI agents and agent tools by enterprises.
Artificial intelligence (AI) may soon move beyond chatbots to a new era of agent AI, where autonomous software agents plan, reason, and execute complex tasks on behalf of other users. MarketsandMarkets estimates that the global AI agent market could grow from approximately $5.2 billion in 2024 to $52.6 billion in 2030, representing a nearly 10-fold expansion over this decade.
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All major companies are racing to deploy these agents for every use case in customer service, software development, and business operations. microsoft (NASDAQ: MSFT) It looks like we’re already ahead of ourselves. Here’s why:
Infrastructure that powers AI agents
During the fiscal second quarter 2026 earnings call, CEO Satya Nadella explained that Microsoft’s AI strategy consists of three layers: the cloud infrastructure that powers the AI models, the platform used to build AI agents, and the high-value applications in which those agents are deployed. Therefore, Microsoft is committed to controlling every aspect of building and running AI agents.
The foundation of this strategy is Microsoft’s massive cloud infrastructure. Microsoft Cloud segment revenue in the second quarter rose 26% year-over-year to $51.5 billion, while Azure and other cloud services (part of Microsoft Cloud) grew 39% year-over-year. This infrastructure provides Microsoft with the computing power needed to train AI models and run large numbers of AI agents at scale.
Microsoft is optimizing its cloud infrastructure to handle more AI tasks with less computing power and energy. These efficiency improvements are important because agent AI can involve generating large numbers of AI queries that require significant processing power.
Platforms and applications for AI agents
Beyond infrastructure, Microsoft builds platforms such as Azure AI Foundry, a service that helps enterprises build and deploy AI applications, and Microsoft Fabric, a unified data platform that organizes and analyzes enterprise data. Through these platforms, companies can choose from multiple AI models, connect models to corporate data, coordinate external tools and workflows, and build, customize, and deploy AI applications and agents.
Microsoft is seeing aggressive adoption of these services. Fabric has more than 31,000 customers and annual sales of more than $2 billion. Meanwhile, the number of customers who spent $1 million or more with Foundry each quarter increased nearly 80% year-over-year at the end of the second quarter.
Microsoft also uses agent functionality in high-value applications used by millions of employees and developers. Products like Microsoft 365 Copilot and GitHub Copilot allow users to deploy AI agents directly within the tools they know to author documents, analyze data, generate code, and automate workflows. The company ended the second quarter with 15 million paid seats in Microsoft 365 Copilot and 4.7 million paid subscribers in GitHub Copilot.
Accelerate enterprise adoption
Large organizations are increasingly adopting Microsoft’s agent tools. More than 80% of Fortune 500 companies build agents using Copilot Studio and Agent Builder, the company’s low-code tools for creating and deploying AI agents. Enterprises are also deploying Copilot at scale, with the number of customers using more than 35,000 Copilot seats at the end of the second quarter tripled year-over-year. Therefore, AI assistants are also moving beyond pilot programs and becoming integrated into enterprise technology stacks.
As enterprises deploy more agents through Copilot and other tools, demand for Azure compute capacity, Azure AI Foundry, and Fabric will also increase. Therefore, increased adoption of agent AI could be a solid positive for Microsoft’s cloud ecosystem as a whole.
Strong fundamentals support agent AI opportunity
Microsoft is one of the largest and most profitable technology companies in the world. In the second quarter, the company’s revenue was $81.3 billion, an increase of 17% year over year, and earnings per share were $4.14, an increase of 24% year over year. Operating profit also increased 21% year-on-year to $38.3 billion, highlighting the high profitability of the company’s core business.
The company also ended the second quarter with nearly $89.5 billion in cash on its balance sheet. Therefore, the company has significant financial flexibility to invest in AI-related growth initiatives.
Despite these strengths, Microsoft currently trades at a price-to-earnings ratio of 25.7x, well below its average price-to-earnings ratio of 33.7x over the past three years. The company trades at a much more reasonable valuation than many smaller AI companies that aren’t yet profitable.
If the agent AI market continues to grow at the expected pace, Microsoft’s strengths across infrastructure, platforms, and applications stand to greatly benefit from this opportunity. Microsoft therefore appears to be an attractive stock for investors looking for exposure to the rapidly growing agent AI market.
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Manali Pradhan, CFA has no position in any stocks mentioned. The Motley Fool has a role in and recommends Microsoft. The Motley Fool has a disclosure policy.
