Is Microsoft (MSFT) Halal?
Screener: Yes — Microsoft passes Shariah screening as of October 2026. Its business (software, cloud services, devices) is halal, its interest-bearing debt is 1.06% of market cap, and its interest-and-dividends income is 0.99% of revenue. Below: the full screening math and the caveats that could change the answer.
Gate 1: Business activity
Microsoft is a software and cloud company. Its FY2026 10-K (filed July 29, 2026) reports FY2026 revenue of $331.8 billion across three segments: Productivity and Business Processes ($140.0B — Microsoft 365, LinkedIn, Dynamics), Intelligent Cloud ($137.8B — Azure, server products), and More Personal Computing ($54.1B — Windows, devices, Xbox, search advertising). None of its businesses are in prohibited industries (alcohol, gambling, conventional finance, weapons, adult entertainment, non-halal food).
The nuance investors ask about: the OpenAI investment. Microsoft holds a large equity-method investment in OpenAI (the 10-K notes billions in net recognized gains from it in FY2026). It is an investment stake in an AI company, not a lending or insurance business, so the business-activity gate passes. The investment’s gains flow through “other income,” not the interest-income line used in the 5% screen.
Gate 2: Financial ratios
AAOIFI-style screening applies three ratio tests against the latest published financials:
| Ratio | Microsoft (Oct 2026) | Ceiling | Result |
|---|---|---|---|
| Total interest-bearing debt ÷ market cap | 1.06% ($40.3B interest-bearing debt on ~$3.81T market cap) | < ~33% | PASS |
| Cash + short-term investments ÷ market cap | 2.02% ($76.8B cash + short-term investments on ~$3.81T market cap) | < ~33% | PASS |
| Non-compliant income ÷ total revenue | 0.99% ($3.30B interest-and-dividends income on $331.8B FY2026 revenue) | < 5% | PASS |
Figures: FY2026 10-K (year ended June 30, 2026, filed July 29, 2026) for revenue ($331.8B), debt, and cash; market data September 30, 2026 (~$3.81T USD market cap at $512.90/share on 7.427B shares outstanding). Debt = long-term debt noncurrent ($31.1B) + current portion ($9.2B). Cash = cash and equivalents ($20.9B) + short-term investments ($55.9B). The interest line combines interest and dividends received ($3.30B), which is conservative for the 5% screen.
Purification
Microsoft pays a quarterly dividend ($0.83–$0.91/share during FY2026, per the 10-K). The purification factor is the company’s non-compliant-income ratio: about 0.99% of any dividends received. If you follow a strict methodology, run the dividends through our purification calculator.
What could change the screener
- Debt-funded AI capex. At 1.06%, Microsoft has enormous headroom — but sustained heavy borrowing for data-center build-outs would be worth re-checking.
- Rising interest income. Currently 0.99%; a much larger cash pile earning interest would show up in the 5% income screen first.
- Business-mix shifts. Any move into lending or other financial services at meaningful scale would need re-examination — nothing in the current filings suggests one.
We re-screen on a quarterly cadence — the screener above reflects the latest annual report and October 2026 market data.
How Canadians buy it
Microsoft trades only on the NASDAQ as MSFT — there is no TSX listing, so you buy in USD. To convert cheaply, use Norbert’s gambit on Questrade rather than paying a broker’s conversion spread. MSFT is available through Questrade and Wealthsimple’s self-directed accounts, and it can be held in a TFSA, RRSP, or FHSA — all wrappers are neutral to Shariah compliance. See our Questrade vs Wealthsimple comparison for the practical differences.
FAQ
Is Microsoft halal to invest in?
As of October 2026: yes, it passes Shariah screening — halal business, 1.06% debt ratio, 0.99% interest-and-dividends income. This is a screening result, not a religious ruling: scholars differ and financials change every quarter.
Does Microsoft’s big OpenAI stake make it non-compliant?
No. The OpenAI holding is an equity investment in an AI company, not a lending, insurance, or gambling business, so the business-activity gate passes. Its gains flow through “other income,” not the interest-income line used in the 5% screen.
Do I need to purify Microsoft’s dividend?
Microsoft pays a quarterly dividend ($0.83–$0.91/share during FY2026). With 0.99% non-compliant income, the purification amount on it is small — but if you follow a strict methodology, run any dividends through a purification calculator.
What if Microsoft becomes non-compliant after I buy?
The common guidance: sell the holding (scholars differ on timing when it’s at a loss — ask a qualified scholar), purify the non-compliant share of any dividends received, and don’t offset other gains against it. Re-screen quarterly; we’ll update this page when the numbers move.
Screened with our two-gate Shariah screening methodology (business-activity gate, then AAOIFI-style financial ratios).