Microsoft Corporation (MSFT) is one of the most searched stocks among Muslim investors asking "Is MSFT halal?" We screened MSFT against all five major Shariah screening methodologies — AAOIFI, Dow Jones Islamic Market (DJIM), FTSE Shariah, MSCI Islamic, and S&P Shariah — using real financial data from the Halal Terminal API.

Quick Verdict: MSFT is COMPLIANT (5/5 methodologies pass)

Microsoft Corporation passes all five Shariah screening methodologies. Business activity is permissible and financial ratios are within limits. Purification rate: 1.2%.

Methodology-by-Methodology Results

Different Shariah screening standards use different financial thresholds and denominators. Here are MSFT's results across all five:

Methodology Result Notes
AAOIFI PASS Debt/assets at 14.5% — well under the 30% threshold. Clean compliance.
DJIM PASS Debt/market-cap 2.2%, cash/market-cap 1.1% — both far below 33% limits.
FTSE PASS Debt/assets 14.5% under 50%. Cash+receivables/assets 18.4% under 50%.
MSCI PASS All ratios below 33.33% with wide margins. Strong compliance.
S&P PASS All market-cap ratios under 3%. Microsoft's $3T+ market cap makes leverage ratios minimal.

What Does Microsoft Corporation Do?

Microsoft develops and licenses software (Windows, Office 365), operates cloud infrastructure (Azure), sells gaming hardware and content (Xbox), and provides enterprise solutions (LinkedIn, Dynamics, GitHub). Microsoft's primary revenue comes from software licensing, cloud services, and advertising — all permissible activities. Microsoft does not derive meaningful revenue from prohibited industries. Its LinkedIn financial products and minor lending activities remain well below the 5% impermissible revenue threshold.

Business activity screening result: PASS — Software development and cloud computing — permissible primary activity

Financial Ratio Breakdown

Shariah screening evaluates a company's financial structure to ensure it doesn't rely excessively on interest-bearing debt or hold too much cash in interest-bearing accounts. Here are MSFT's actual ratios compared to the thresholds:

Ratio MSFT Actual Threshold
Debt / Total Assets 14.5% < 30% (AAOIFI) / < 33% (MSCI)
Debt / Market Cap 2.2% < 33% (DJIM, S&P)
Cash / Total Assets 7.2% < 30% (AAOIFI) / < 33% (MSCI)
Cash / Market Cap 1.1% < 33% (DJIM, S&P)
Receivables / Total Assets 11.2% < 30% (AAOIFI) / < 33% (MSCI)
Receivables / Market Cap 1.7% < 33% (DJIM, S&P)
Interest Income / Revenue 1.2% < 5% (all methodologies)

Purification Rate

MSFT's purification rate is 1.2%. This means for every $1,000 in dividends received from MSFT, you should donate $12.00 to charity to purify the impermissible income portion (interest income relative to total revenue).

What is purification?

Even Shariah-compliant companies may earn small amounts of interest income. The purification rate tells you what percentage of dividends to donate to charity to "cleanse" your income. Read our full purification guide →

Detailed Analysis

Microsoft is a strongly compliant stock across all five Shariah methodologies. Its combination of moderate debt, massive market capitalization, and permissible core business makes it one of the most straightforward mega-cap stocks for Muslim investors. The purification rate of 1.2% means for every $1,000 in Microsoft dividends (currently yielding about 0.7%), approximately $12 needs to be donated to charity. Microsoft's consistent dividend growth history makes it attractive for halal income-focused portfolios.

Screen MSFT Yourself via API

Get real-time screening results for MSFT (or any stock) using the Halal Terminal API:

curl https://api.halalterminal.com/api/screen/MSFT \
  -H "X-API-Key: YOUR_KEY"

Or in Python:

import requests

resp = requests.post(
    "https://api.halalterminal.com/api/screen/MSFT",
    headers={"X-API-Key": "YOUR_KEY"}
)
data = resp.json()

print(f"Compliant: {data['is_compliant']}")
print(f"AAOIFI:    {data['aaoifi_compliant']}")
print(f"DJIM:      {data['djim_compliant']}")
print(f"Purification: {data['purification_rate']:.1%}")

The API returns compliance status across all 5 methodologies, actual financial ratios, purification rate, and business activity screening — all in a single call.

Two ways to screen

Halal Terminal

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Key Takeaways