Is Microsoft (MSFT) Halal to invest in?

Is Microsoft (MSFT) Halal to invest in?

How much of Microsoft’s revenue comes from haram?

Microsoft earns its revenue from the following revenue sources:

  • Productivity and Business Processes:

Includes Microsoft Office Commercial products and subscriptions.

Microsoft’s products include Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, Skype for Business, and Linkedin. 

  • Intelligent Cloud:

Microsoft provides server products and cloud services used by businesses and developers.

These include Azure, SQL Server, Windows Server, Visual Studio, System Center, and GitHub.

Microsoft’s Enterprise Services include Premier Support Services and Microsoft Consulting Services.

  • More Personal Computing:

Includes Windows operating system licensing, Windows cloud services, and other Windows commercial offerings.

The segment also includes revenue derived from patent licensing, Windows Internet of Things, and MSN advertising.

Microsoft offers devices such as tablets, laptops, phones, and PC accessories.

Additionally, Microsoft generates revenue from advertising through its search platform Bing.

Microsoft’s gaming revenue includes Xbox console sales, Xbox Live subscriptions, video game sales, and third-party video game royalties.

The contributions from each of Microsoft’s revenue segments in their Q1 2022 report were as follows:

Areas of concern for Practical Islamic Finance are revenue generated from online advertising (if the product/service being advertised is not Islamic) and revenue from gaming (if the game being monetized has unIslamic themes or imagery).

Three Months
Ended September 30, 2021
% of total revenue
Gaming $                                          3,593,0007.93%
Search Advertising $                                          2,656,0005.86%
Total Microsoft Revenue from all products $                                         45,317,000
*Numbers in thousands, U.S. dollars

It would not be accurate to consider all revenue from gaming or all revenue from search advertising to be haram.

However, determining what percentage of each segment actually relates to things that are haram is extremely difficult since Microsoft does not provide game-specific or advertiser-specific breakdowns for its revenue.

If we had to guess, half of Gaming revenue is probably suspect and ~20% of search advertising. Keep in mind, just a guess. If our completely unscientific guess is accurate, that would put revenue from haram sources at ~5% of total revenue.

Practical Islamic Finance concludes:

Only a non-material portion of Microsoft’s revenue comes from haram.

Does Microsoft rely on interest to operate?

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What is Microsoft’s Environment, Social, and Governance impact?


In 2020, Microsoft reduced direct and indirect greenhouse emissions associated with purchasing electricity, heat, cooling, or steam by 586,683 metric tons of CO2.

In addition, Microsoft states its operations led to a diversion of over 60,000 metric tons of waste from landfills.

Microsoft also invested $129 million across funds and organizations related to carbon reduction, water management, and circular economy. 


Microsoft has an impressively high Glassdoor rating of 4.4 out of 5.0 from over 33,000 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.

Some compensation and benefits Microsoft offers its employees are:

  • 10 percent discount on Microsoft Stock through Employee Stock Purchase Plan
  • 1:1 donation matching of up to $15,000 per year totaling to $110M in FY20.
  • 50 percent 401k match for up to $19,500.


No notable governance highlights.

Practical Islamic Finance concludes:

Microsoft has a net positive ESG impact.

Comfort Rating

From Microsoft’s business, financial, and ESG reviews, Practical Islamic Finance rates Microsoft stock as:

Comfortable to invest in from a Halal perspective.


This rating was upgraded from “Questionable” on December 9th, 2021 given the dropping contributions of gaming and advertising to Microsoft’s revenue.


PS5 vs Xbox Series X Sales: Who Is Winning the 2021 Console War So Far? 

Q1 2022 10-Q

2021 10-K

2020 Environmental Sustainability Report 

Microsoft Reviews 

Employee Giving & Corporate Giving Program

US Benefits

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