Europe's second-highest court on Wednesday rejected Norwegian browser maker Opera's (OPRA.O) challenge against EU antitrust regulators' decision to exempt Microsoft's (MSFT.O) browser Edge from rules reining in the power of Big Tech.
The European Commission in its 2024 decision said Edge was not an important gateway for businesses to reach users even though it met the quantitative criteria set out under the Digital Markets Act which sets out a list of dos and don'ts for Big Tech.
"The General Court upholds the Commission’s decision not to designate Microsoft as a gatekeeper in relation to Edge," the Luxembourg-based tribunal said.
The case is T-357/24 Opera Norway v Commission.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Microsoft Corp (NASDAQ:MSFT)'s accelerating cloud growth, improving AI efficiency and greater visibility into investment returns prompted Bank of America to raise its price objective on the stock.
The bank's new target of $600, up from $500, is based on 28 times its calendar year 2027 earnings-per-share estimate, up from 24 times previously.
The upgrade follows Microsoft's fourth-quarter fiscal 2026 results, which BofA said reinforced its constructive view on the company's AI strategy. Azure growth accelerated from 39% in the third quarter of fiscal 2026 to 43% in the fourth quarter, with guidance calling for 45% growth in the first quarter of fiscal 2027.
Paid Microsoft 365 Copilot seats surpassed 30 million, with net additions more than doubling quarter-over-quarter, while remaining performance obligations rose 84% year-over-year.
Microsoft is building a broad portfolio of internal and external AI models, BofA said, allowing customers to select the most cost-effective model for each task while maintaining governance over user actions. The bank noted that not every workload requires a complex, expensive frontier model, and that Microsoft's approach helps optimize performance while reducing token consumption.
According to BofA, Microsoft's specialized MAI-Code-1-Flash model delivers performance comparable to GPT-5.6 for common Excel tasks at a lower cost, while other MAI models have reduced GPU consumption costs by as much as 84% in PowerPoint and 89% in Dynamics 365. BofA said this positions Copilot as an orchestration layer for enterprise AI, combining stronger controls with improved economics.
The bank also pointed to gains in AI infrastructure efficiency, driven by three initiatives: optimized engineering and software across Microsoft's CPU and GPU fleet, which increased Copilot workload throughput fourfold year-to-date; a nearly 50% reduction in the time needed to operationalize new GPUs in Microsoft's largest regions, which BofA said accelerates monetization of incremental capacity; and MAI models co-designed with Microsoft's internally developed Maia 200 AI chip, which the company said deliver 40% better performance per watt.
BofA said these efficiencies could lower the cost of serving AI workloads, support margins and improve return on invested capital over time.
Bank of America analysts are even more bullish on Microsoft (NASDAQ:MSFT) after the company’s latest results showed accelerating Azure growth tied to its AI strategy.
The firm reiterated a Buy rating and raised its price target to $600 per share from $500.
“Microsoft’s 4Q26 results provided further validation of its AI strategy, with Azure growth
accelerating from 39% in 3Q26 to 43% 4Q26 and guidance of 45% in 1Q27,” BofA analysts wrote, per CNBC.
Nvidia’s AI Financing StrategyThat momentum in AI is echoed by Nvidia Corp (NASDAQ:NVDA), which is actively financing AI infrastructure.
Nvidia disclosed during its earnings call that it extended payment terms for some investment-grade customers to 60 days, a move aimed at removing financial bottlenecks in AI deployment.
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The company has invested nearly $50 billion in frontier AI labs and partnered with major financial firms to raise over $500 billion in third-party infrastructure capital. The strategy supports AI data centers through revenue-sharing arrangements, providing minimum revenue guarantees for neocloud operators. Nvidia’s initiatives demonstrate its commitment to sustaining AI’s momentum.
Bill Ackman’s Microsoft BetMicrosoft’s AI-driven growth aligns with Bill Ackman‘s investment strategy. Ackman had already made Microsoft one of his largest disclosed investments, with Pershing Square Inc. (NYSE:PS) Capital Management’s first-quarter 2026 Form 13F showing Microsoft as its fourth-largest holding.
Ackman’s early conviction in Microsoft is gaining technical confirmation as the stock continues to rally.
Technical AnalysisMicrosoft’s RSI(14) stands at 64.74, indicating a neutral signal, with the stock trading 15.29% above its 50-day SMA of $435.91 and 16.57% above its 200-day SMA of $431.13. The 50-day SMA is currently above the 200-day SMA, forming a golden cross and suggesting a continuation of the positive trend.
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Image: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Big Tech has quietly spent a sum that rivals the GDP of a mid-sized country building AI infrastructure, but the real financial reckoning has not yet arrived on any income statement. One accounting schedule will determine whether these bets pay…
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The sticker shock in Big Tech earnings this year came from the capital expenditure line. Microsoft (NASDAQ:MSFT | MSFT Price Prediction) spent $115.95 billion on property and equipment in the fiscal year ended June 2026. Alphabet (NASDAQ:GOOGL) laid out $44.92 billion in a single quarter, watched free cash flow flip to negative $5.86 billion, and suspended its buyback. Amazon (NASDAQ:AMZN) spent $54.21 billion in the June quarter alone. Meta Platforms (NASDAQ:META) guided full-year capital spending to $130 to $145 billion. Yahoo Finance pegged the four-company AI data center bill at roughly $1 trillion in an August 4, 2026 analysis.
A $100 billion data center is a capital asset, expensed in slices over the years the equipment is in service. The cash leaves the company now, but the accounting expense arrives in slices over the years the equipment is expected to be useful. That yearly slice is called depreciation for physical assets and amortization for intangibles. If a server has a useful life of six years, roughly one sixth of its cost lands on the income statement each year, reducing reported earnings per share.
Why the Timing Gap Is the Real Story Depreciation is where the trillion dollar bet actually shows up in profit margins. And it shows up on a schedule, whether the customers arrive or not. Meta is the early warning. Operating margin fell to 31% from 43% a year earlier. CFO Susan Li said the year-over-year expense growth came from “higher depreciation, data center operating costs, and third-party cloud spend.” Free cash flow collapsed to $784 million, from $8.55 billion a year earlier. EPS missed at $6.18 against a $7.2173 estimate, breaking a six-quarter streak. The stock is down 22.27% over the past year.
Companies do have a lever here, and it matters. The longer the assumed useful life, the thinner each year’s depreciation slice. On its July 29, 2026 call, Microsoft CFO Amy Hood told investors that “effective at the start of FY27, we are extending the estimated useful life of our data centers and office buildings from 15 to 25 years.” She described the impact as a “minimal benefit to FY27 operating income.” The change flatters near-term earnings. It does not change how much cash left the building.
The offset the bulls point to is contracted backlog. Microsoft’s commercial remaining performance obligations reached $678 billion, up 84%. Amazon’s AWS backlog sits at $496 billion. Andy Jassy framed the mechanics plainly on the July 30, 2026 call: “Data center capital is spent starting two years before we can put servers into them to start monetizing.” That gap is the risk.
Line Item Retirees Should Actually Watch Next Quarter On the next set of quarterly reports, ignore the headline capex figure. Look for depreciation and amortization inside the cash flow statement or the cost of revenue footnote. Then compare its growth rate to the growth rate of the cloud or AI segment it is meant to support. If Azure grows 45% and depreciation attributable to AI infrastructure grows faster, operating margins compress further. If AWS grows 37% and depreciation grows slower, the buildout is paying. That single comparison, quarter by quarter, will tell you whether the $1 trillion bet is working long before any analyst does. The other side of the trade sits with the power, cooling, and networking suppliers cashing those checks, which we profiled in a free report on seven of them here: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).
Contact [email protected] for any questions or corrections.
Microsoft just posted record revenue and five straight earnings beats, yet the stock has barely moved in a year. Here is the scenario where that changes in a dramatic way before 2031.
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Microsoft (NASDAQ:MSFT | MSFT Price Prediction) just closed a record fiscal year with annual revenue above $331 billion and Azure surpassing $100 billion for the first time. Yet the stock is up just 6.86% year to date and only 1.6% over the past year.
Shares changed hands at $513.53 at Friday’s close. My question is direct. Can Microsoft double from here and reach $1,000 by August 2031? Here is what has to happen.
Why Microsoft Shares Are Stuck Despite Record AI Growth The disconnect is real. Microsoft posted five consecutive quarterly EPS beats, and yet the one-year return is basically flat. The reason is capex. Full-year capital expenditures hit $115.948 billion, up 79.62%, and free cash flow fell 6.46% despite operating cash flow surging 34.35%. The FY27 capex bar just moved to roughly $175 billion.
Investors are asking a fair question: at what point does AI spend earn its keep? With a beta of 1.099, the stock has been volatile but rangebound. Shares recovered sharply after earnings, gaining 31.74% in the past month, but the share price is still catching up to fundamentals.
Wall Street Sees 11% Upside. Our Model Says 19% The consensus is heavily bullish. Fourteen strong buys, 40 buys, three holds, zero sells, with an average target of $569.45. That is a modest premium to today’s price. Our own model is more constructive, pointing to a one-year base case of $609.58 with a bull case of $709.58 and a bear case of $520.81. Confidence is high at 0.9.
Where I push back on Wall Street is on earnings trajectory. Quarterly EPS grew 31.7% year over year and 95% of analysts remain bullish. Targets look anchored to a 12-month lens. The doubling story requires a five-year lens.
The Path to $1,000 Per Share Reaching $1,000 from today’s price of $513.53 would require a gain of 94.7%. With forward EPS of $19.97, a price of $1,000 implies a forward P/E of 50x. Our base case of $609.58 already implies 30x, meaning the bold target requires about 20x of additional multiple expansion, or equivalent EPS growth to compress that multiple back down.
The compression story is the realistic path. If EPS compounds off the $17.28 FY26 EPS at a Copilot-driven pace, that 50x becomes far more digestible by 2031.
Support: commercial RPO surged 84% to $678 billion, Azure guidance is roughly 45% growth for Q1 FY27, and CEO Satya Nadella said “I’ve never been more confident in Microsoft’s opportunity to drive durable long-term growth.” The primary risk is that FY27 capex of $175 billion produces overcapacity if AI demand cools.
Where Microsoft Trades Today vs Its Earnings Power Today Microsoft trades at roughly 26x forward earnings. That is a premium to the market but not extreme for a business compounding revenue at 17.79% with 45.1% operating margins and 34% ROE.
Shares sit between the 52-week low of $348.54 and the 52-week high of $549.20. Over the last decade, Microsoft has returned 898.97%. That is the long-term context that makes a five-year double a defensible scenario.
Is $1,000 Realistic? Here’s My Take Reaching $1,000 requires a 94.7% gain, and I think it is a stretch, but a defensible one over five years. Three things need to go right.
Azure needs to sustain 30%-plus growth as capacity comes online. Copilot needs to move beyond 30 million paid seats into per-seat plus consumption pricing at scale. And capex intensity has to normalize before free cash flow inflects.
A demand pause in AI infrastructure is what would derail it (the power, cooling, and networking suppliers riding the same buildout are the subject of a free report we put together here: 7 Stocks Powering the AI Boom). Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Microsoft could reach $1,000 in 2031.
Contact [email protected] for any questions or corrections.
Azure is printing cash while Tesla burns it chasing a future that has yet to show up in margins. Before you buy the August momentum in either name, the numbers reveal a stark split in what each company is actually…
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Microsoft (NASDAQ: MSFT | MSFT Price Prediction) and Tesla (NASDAQ: TSLA) enter September with momentum, but their earnings tell opposite stories. Microsoft closed a record fiscal year powered by Azure and Copilot. Tesla posted record deliveries while operating income collapsed under an AI capex wave.
Azure Prints Cash. Tesla Burns It to Build the Future. Microsoft delivered $90 billion in Q4 revenue, up 18%, with Azure crossing $100 billion annually and Microsoft 365 Copilot passing 30 million paid seats. Satya Nadella called it “a very strong close to what was a record fiscal year for us” and said “demand continues to exceed available supply”. Commercial RPO jumped to $678 billion, a backlog that pre-sells future quarters.
Tesla was messier. Revenue hit $28.24B on record Q2 deliveries of 480,126 vehicles, yet EPS of $0.33 missed the $0.54 estimate. Operating margin cratered to 1.4%. CFO Vaibhav Taneja said “we exited Q2 with our largest order backlog since 2023”, but free cash flow flipped to negative $1.09B. FSD attach hit 55% of North American deliveries, a real hook, just not yet an earnings driver.
Business Driver Microsoft Tesla Growth engine Azure, Copilot, Foundry Model Y, FSD, Robotaxi Margin trend Operating margin near 45% Auto GM ex-credits fell to 16.3% Cash story FCF $19.6B in the quarter FCF negative, capex +142% YoY Monetizing AI Today vs. Financing AI for Tomorrow Microsoft spends to feed a paying pipeline. Azure is guided to grow around 45% in constant currency in Q1 FY27, and Amy Hood noted “when we can make efficiency gains, they are quickly monetized in quarter”. That capex wave also lifts the power, cooling, and networking suppliers behind the data centers (we rounded up seven of them in a free report here). Tesla spends against a promise. Elon Musk framed it plainly: “this is a massive CapEx year, but I’m confident that all the things that we’re investing in will yield incredible returns”. Robotaxi covered 380,000 miles with “zero notable incidents”, impressive but early.
Valuation reflects the split. MSFT trades near 28 times earnings with a $569.45 analyst target. TSLA sits near 332 times earnings with a $390.09 target, only slightly above spot.
What Decides the Next Leg For Microsoft, watch Azure capacity. Nadella conceded capacity constraints and guided FY27 capex to roughly $175 billion. If GPU lead times improve, that RPO converts smoothly. For Tesla, the near-term test is Cybercab ramp, Optimus milestones, and whether auto gross margin stabilizes now that regulatory credits fell to $146M. Keep an eye on the stock as the 0.73 put/call ratio hints at a cautious options crowd.
Why I Lean Microsoft Into September Microsoft fits the setup I want right now. The 9.37% one-month gain came with real earnings behind it, not just narrative. Tesla’s 18.23% August rip is exciting, but it sits on a -18.18% YTD hole and margins I do not yet trust. If you want durable cash flow, Copilot seat growth, and a $678 billion backlog, MSFT is the cleaner play. If you are underwriting Robotaxi and Optimus with a decade-long horizon and can stomach volatility, TSLA has the bigger asymmetric payoff. Better risk-adjusted setup goes to Microsoft.
Contact [email protected] for any questions or corrections.
What happens after you lose a six-figure job at one of the world's biggest tech companies? Four former employees of Google, Meta, Microsoft, and Intel discuss the shock they felt when they were laid off, the difficult search for a new job, and the financial and emotional fallout that followed.
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What happens after you lose a six-figure job at one of the world's biggest tech companies? Four former employees of Google, Meta, Microsoft, and Intel discuss the shock they felt when they were laid off, the difficult search for a new job, and the financial and emotional fallout that followed.
Microsoft (MSFT -0.69%) will send its shareholders their next dividend payment ($0.91 per share, declared on June 10) on Sept. 10. For most dividend stocks, that would be the least interesting data point of the month, because the payment arrives right at the time of year when the board has historically announced its annual increase. The latter is likely what dividend investors will care about more.
The software giant has raised its dividend every year for more than a decade -- 16 consecutive annual increases, all announced in September. The most recent came on Sept. 15, 2025, when the board brought the quarterly payment from $0.83 to $0.91 -- an increase of just under 10%.
That track record is steady enough to support a real forecast. So let's make one.
Image source: The Motley Fool.
A raise in the same band year after yearMicrosoft's dividend growth has been strikingly stable.
The last six annual increases were 9.8%, 10.7%, 9.7%, 10.3%, 10.7%, and 9.6% -- all within a band between 9.6% and 10.7%. And a longer window barely changes the story. The quarterly payment has grown from $0.36 at the end of 2015 to $0.91 at the end of 2025, which equates to about a 9.7% annual compound rate over that decade.
Apply that band to the current payment of $0.91, and the next quarterly dividend lands between about $1.00 and $1.01.
So the answer from history is specific. Expect about $1.00 per quarter, or $4.00 a year, which would be an increase of about 10%, likely announced in September. Of course, the calendar is a pattern, not a promise. Microsoft has not scheduled or confirmed anything, and a board can always go off script.
Can the spending surge bend the pattern?The reasonable concern is Microsoft's capital expenditures. The company allocated $115.9 billion to property and equipment in fiscal 2026 (the year ended June 30) -- an 80% jump from last year as it builds artificial intelligence (AI) data center capacity.
All that construction eats into the cash that would otherwise accumulate. Despite a 34% rise to $182.9 billion in operating cash flow, only about $67 billion in free cash flow remained after capital expenditures -- compared with about $72 billion a year earlier.
The earnings underlying the payment, however, are growing much faster than the payment itself. Fiscal 2026 revenue grew 18% to $331.8 billion, and Azure revenue crossed $100 billion for the year while rising 41%. The company's net income of $133.7 billion, meanwhile, came in 31% above the prior year.
A dividend that grows 10% a year while earnings grow at rates like those becomes safer each year, not riskier.
Now consider what the dividend actually costs. At $0.91 per quarter across about 7.4 billion shares, Microsoft pays out about $27 billion a year. That's about 15% of operating cash flow, and about 20% of the $17.95 per share the company earned in fiscal 2026. And a 10% increase adds something like $2.7 billion a year to the tab -- manageable but still meaningful.
Still, the AI spending surge is squeezing Microsoft's free cash flow, and even the squeezed figure still covers the dividend more than twice over.
The only unknown is the sizeIf anything bends this September's figure, I would expect it to bend toward the lower end of the band and not below it. With data center construction of that scale still underway, boards tend to protect flexibility. An increase near 9% or 10% preserves the streak and is easy to fund.
Could the board surprise with something larger? Yes, it has room. But nothing in its behavior for a decade suggests it wants to grab headlines with the dividend, and I don't expect it to start now.
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The dividend yield will remain small either way. At about $505 per share, Microsoft yields about 0.7%, and an extra dime per quarter doesn't change that.
The increase, assuming one occurs, matters for what it signals, which is a payment that grows through every cycle -- AI construction included.
So what will this year's raise amount to? I expect a move to about $1.00 per quarter, announced in September, in the same band as the last six. For investors who own Microsoft, the most important thing to watch is free cash flow. The dividend is easily affordable today. Whether it remains so depends on a data center bill that's still rising.
Longtime partners OpenAI and Microsoft both indicated they were suffering from outages for key products on Monday, though there were no reports that were connected.
OpenAI said ChatGPT Work, its enterprise artificial intelligence agent, has been experiencing elevated errors and latency for roughly three hours. Microsoft said it was having issues with Exchange Online.
"Users across multiple subscription plans may be unable to start or continue tasks in ChatGPT Work," OpenAI said on its status page. "We are continuing work on implementing a mitigation."
As 2:24 p.m. ET on Monday, over 1,100 users reported issues with OpenAI's products on Downdetector, a website that tracks outages. For Microsoft Outlook, the number shortly after that was close to 4,600. Both peaked a little earlier in the day.
"ChatGPT Work isn't working right now," OpenAI's ChatGPT account wrote in a post on X. "Sorry about that, we're working on a fix!"
In July, OpenAI introduced ChatGPT Work, an enterprise agent that directly competes with Anthropic's Claude Cowork. The agent is designed to help staffers take on more "ambitious tasks," like creating polished slides, web apps, sheets, documents and carrying out other complex projects.
Microsoft invested its first $1 billion in OpenAI in 2019, providing the software giant with an early foothold in AI, three years before the launch of ChatGPT. That investment later swelled to $13 billion as the strategic relationship tightened, but more recently the two companies have been competing on multiple fronts.
"We've confirmed that users may experience degraded functionality with various Exchange Online functionalities," Microsoft said on X through its 365 status account. "We're reviewing service telemetry and diagnostic data to isolate the source of the issue."
Elon Musk built SpaceX into a rocket empire and Starlink into a global network, but his AI ambitions may now be dragging both down. What happens when a billionaire who hates losing refuses to stop betting on a hand that…
For several months, Elon Musk’s xAI seemed to be falling behind OpenAI, Anthropic, Google’s Gemini, and the tier of AI companies just below them. Industry experts have recently reported that Musk’s Grok is well behind Claude, GPT, and Gemini in adoption. One metric people use is Apple App Store downloads. ChatGPT, Gemini, and Claude are among the top 25. Grok isn’t on the list at all.
In the enterprise software business, xAI is rarely, if ever, listed as a winner in the race to do business with huge enterprises. Even SpaceX (NASDAQ: SPCX | SPCX Price Prediction) CEO Elon Musk has admitted that, while Grok has not lost the race, it is running well behind. He recently said, “SpaceXAI’s Grok Has Fallen Behind Competitors.” He added, “I’m not used to losing.”
The Grok failure does several things. Among them is that it takes one horse out of the race for AI leadership. It is already a crowded market. And it is marked by investments into the billions of dollars to build AI data centers. Mega-tech companies like Microsoft (NASDAQ: MSFT) have started to run low on cash and have turned to financial companies for assistance. BlackRock, for example, said it would put $4.9 billion into a Meta (NASDAQ: META) data center.
Musk’s problem, from the standpoint of SpaceX shareholders, is that he won’t give up. In the most recent quarter, SpaceX put $15.8 billion into AI projects. Musk said that was only a beginning. “We are building AI compute capacity at scale faster than anyone else.” Given that his primary competitors are investing hundreds of billions of dollars, SpaceX is putting its balance sheet at risk, even if Musk gets financial partners to pay some of the bills.
SpaceX’s rocket business and its Starlink division seem like industry leaders and home runs. However, SpaceX shares collapsed in mid-August. They have made a comeback but have traded flat since mid-August. Very likely, the gravity that pulls them down is Musk’s AI dream, which is almost certainly a failure.
Contact [email protected] for any questions or corrections.
As Microsoft Corp. (NASDAQ: MSFT) stock has regained a bullish outlook since late July 2026, Patrick Walravens, a Wall Street analyst at Citizens, expects another rally towards its all-time high (ATH) over the next 12 months.
Walravens reiterated a ‘market outperform’ rating for Microsoft stock, according to a note sent to clients on August 31. This analyst also maintained the firm’s 12-month price target for MSFT at $550.
With MSFT stock trading at $510.73 on Monday, Walravens signals a potential 7.69% upside. He set a cautiously positive sentiment for Microsoft due to revenue-sharing negotiations with Moonshot’s K3, a 2.8-trillion-parameter open-weight Artificial Intelligence (AI) model.
“China’s Moonshot in talks with Microsoft (MSFT, MO, $550 PT), Amazon, Google over K3 revenue sharing at levels up to 30%. This looks like the first serious attempt to price distribution. Negotiations following through would mean moving price towards frontier models,” Walravens noted.
Microsoft stock price target for 12 months Following Citizens’ projected upside for Microsoft stock over the next twelve months, 34 Wall Street analysts surveyed by TipRanks have set an average price target of $564.49. As such, these analysts suggest a possible 10.55% rally, which could enable this stock to reach a new ATH.
The highest 12-month price target among these 34 analysts is $700, while the lowest is $450. Notably, Samik Chatterjee, an expert from JPMorgan Chase & Co. (NYSE: JPM), reaffirmed a Buy rating for this company and set a 12-month price target of $625.
MSFT price performance Year-to-date, MSFT price has signaled bullish sentiment since mid-July 2026, driven by its strong fourth-quarter and full fiscal year 2026 earnings results amid a broader market rebound. As such, Microsoft stock has climbed 7.99% YTD, thereby pushing its market capitalization to $3.8 trillion at the time of writing.
MSFT’s YTD chart. Source: Finbold As Microsoft approaches a key resistance level around its ATH, which was previously rejected twice over the past 12 months, these Wall Street analysts expect a positive exhaustion rally, fueled by rising AI expenditure by enterprise investors.
Featured image via Shutterstock
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Wall Street can't agree on Microsoft NASDAQ: MSFT, and that disagreement might say more about the Federal Reserve than about the company itself. Since July, several firms, including Mizuho, Argus and Barclays, have lowered price targets at various points while maintaining bullish ratings or recommendations.
Microsoft Corp‘s (NASDAQ:MSFT) chart may be flashing a bullish signal now, but hedge fund billionaire Bill Ackman placed his bet much earlier. As the software giant’s 50-day moving average inches toward crossing above its 200-day moving average—a pattern known as a Golden Cross—the technical picture is beginning to align with the conviction that one of Wall Street’s best-known investors has already expressed through his portfolio.
Chart created using Benzinga Pro
Microsoft’s 50-day simple moving average recently climbed to $430.98, putting it just below its 200-day moving average of $431.47, according to Benzinga Pro data. Crossing over it would create a Golden Cross. While technicians view a Golden Cross as a sign that short-term momentum is overtaking the longer-term trend, it is generally considered a confirmation signal rather than a predictor of future gains.
The setup comes after Microsoft’s strong rally over recent months pushed the stock above both moving averages. MSFT stock has climbed over 25% in the past six months, and over 9% in the past month.
Momentum indicators remain constructive, with the Relative Strength Index (RSI) hovering just below overbought territory, while the Moving Average Convergence Divergence (MACD) remains in positive territory despite showing signs of moderating momentum.
For technical traders, the pattern suggests Microsoft’s recent advance is broadening beyond a short-term rally into a potentially stronger long-term trend.
Bill Ackman’s Microsoft BetLong before Microsoft’s chart approached this milestone, Ackman had already made the company one of his largest disclosed investments.
Pershing Square Capital Management’s first-quarter 2026 Form 13F showed Microsoft as its fourth-largest holding, with roughly 5.65 million shares valued at approximately $2.09 billion, accounting for about 15% of the portfolio based on market value. That reflected Ackman’s conviction well before the current technical setup emerged.
Investors should be careful not to misread more recent regulatory filings. Ackman reorganized his investment business earlier this year by launching Pershing Square Inc. (NYSE:PS), a publicly traded permanent-capital vehicle. As a result, several holdings appear as “new” in Pershing Square Inc.’s inaugural 13F filing because they were transferred into a different reporting entity rather than representing fresh purchases.
The distinction matters because it reinforces the central narrative: Microsoft’s investment case did not begin with the Golden Cross. The technical signal is simply catching up to a position Ackman had already established.
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What Microsoft Investors Should WatchA Golden Cross alone rarely changes a company’s long-term outlook. Technical indicators reflect investor behavior; they do not create business fundamentals.
For Microsoft, the more important question remains whether its AI strategy continues to translate into durable revenue growth across Azure, Copilot and the broader software ecosystem.
If those fundamentals remain intact, a strengthening technical picture could attract another layer of momentum-oriented investors, creating broader market participation than fundamentals alone might achieve.
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Investment TakeawayThe significance of Microsoft’s approaching Golden Cross is not that it guarantees further upside, but that it arrives as the stock’s technical picture begins to mirror the confidence institutional investors have already shown.
Ackman’s investment was rooted in Microsoft’s long-term business prospects, not a chart pattern.
For investors, the more interesting development is that technical momentum and the fundamental investment case are now moving in the same direction.
Annex Advisory Services LLC cut its stake in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 1.5% in the second quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The firm owned 235,346 shares of the software giant’s stock after selling 3,595 shares during the quarter. Microsoft makes up approximately 1.5% of Annex Advisory Services LLC’s holdings, making the stock its 19th biggest position. Annex Advisory Services LLC’s holdings in Microsoft were worth $87,789,000 at the end of the most recent reporting period.
Several other hedge funds and other institutional investors also recently added to or reduced their stakes in MSFT. Longfellow Investment Management Co. LLC grew its holdings in Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after buying an additional 20 shares in the last quarter. Bernzott Capital Advisors purchased a new stake in shares of Microsoft during the 4th quarter worth approximately $34,000. Timmons Wealth Management LLC purchased a new stake in shares of Microsoft during the 4th quarter worth approximately $36,000. Fairway Wealth LLC boosted its position in shares of Microsoft by 287.0% during the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after acquiring an additional 66 shares during the last quarter. Finally, LSV Asset Management purchased a new position in shares of Microsoft in the fourth quarter valued at $44,000. 71.13% of the stock is owned by hedge funds and other institutional investors.
Analyst Ratings Changes Several equities research analysts recently weighed in on MSFT shares. Guggenheim restated a “buy” rating and issued a $586.00 price target on shares of Microsoft in a research report on Monday, July 27th. Arete Research lifted their price objective on shares of Microsoft from $730.00 to $870.00 and gave the stock a “buy” rating in a research note on Tuesday, May 5th. Oppenheimer restated an “outperform” rating and issued a $515.00 target price on shares of Microsoft in a report on Wednesday, July 22nd. Wells Fargo & Company upped their target price on shares of Microsoft from $650.00 to $700.00 and gave the company an “overweight” rating in a research report on Wednesday, August 12th. Finally, UBS Group set a $525.00 price target on shares of Microsoft in a report on Thursday, July 30th. Forty-two research analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average price target of $560.27.
Read Our Latest Analysis on MSFT Insider Activity In other Microsoft news, CEO Judson Althoff sold 10,000 shares of the firm’s stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the transaction, the chief executive officer owned 100,447 shares of the company’s stock, valued at approximately $49,007,086.83. This trade represents a 9.05% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, EVP Takeshi Numoto sold 4,810 shares of the business’s stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the completion of the sale, the executive vice president owned 42,677 shares of the company’s stock, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 37,310 shares of company stock valued at $17,256,219 over the last 90 days. 0.03% of the stock is currently owned by corporate insiders.
Microsoft Stock Up 1.7% Shares of NASDAQ MSFT opened at $513.53 on Friday. Microsoft Corporation has a 52-week low of $349.20 and a 52-week high of $553.72. The firm has a market capitalization of $3.81 trillion, a price-to-earnings ratio of 28.59, a PEG ratio of 1.63 and a beta of 1.11. The stock has a 50 day moving average price of $430.87 and a 200 day moving average price of $412.45. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23.
Microsoft (NASDAQ:MSFT – Get Free Report) last released its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping the consensus estimate of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The company had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. During the same period last year, the business posted $3.65 EPS. Microsoft’s quarterly revenue was up 17.7% on a year-over-year basis. Sell-side analysts expect that Microsoft Corporation will post 19.59 earnings per share for the current year.
Microsoft Announces Dividend The company also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. The ex-dividend date is Thursday, August 20th. This represents a $3.64 annualized dividend and a dividend yield of 0.7%. Microsoft’s dividend payout ratio (DPR) is currently 20.27%.
Microsoft News Roundup Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Microsoft’s strong Azure and cloud performance helped drive a rally of roughly 48% from its June low, with the stock reaching a 10-month high and moving above a technical buy point. A recently formed “golden cross,” in which the 50-day moving average moved above the 200-day average, also supports bullish momentum. Bull v. Bear: MSFT Hits 2026 High, is a New Record Next? Positive Sentiment: Microsoft is reportedly in early discussions with Moonshot AI regarding its Kimi K3 model. A potential arrangement could add another AI service to Azure and create a new revenue stream, although negotiations are not finalized. MSFT Stock Alert: Moonshot Could Give Microsoft Another AI Revenue Stream Positive Sentiment: Microsoft’s deployment of more than 25 AI agents across its supply chain illustrates early enterprise use cases for agentic AI, including demand forecasting, freight routing and inventory management. Successful internal deployments could support broader adoption of Microsoft’s AI tools. Microsoft Puts 25 AI Agents to Work on Supply Chain Costs Positive Sentiment: Microsoft is spending heavily on AI infrastructure—approximately $175 billion this year—and has reassured employees that data-center investment is intended to support long-term growth. Azure reportedly surpassed $100 billion, while contracted backlog and commercial bookings remain major valuation supports. Microsoft Reassures Employees About AI Data Center Impacts Neutral Sentiment: Microsoft’s gains have helped lift major indexes, but the strength is concentrated in a few mega-cap technology stocks while small caps and many sectors weaken as bond yields rise. This creates a broader market-risk backdrop despite Microsoft’s relative strength. Dow Jones Futures: Microsoft, Titans Mask Market Weakness Negative Sentiment: One analyst argued that Microsoft’s valuation rerating may be largely complete for now, raising the risk of profit-taking after the recent monthly rally. At the current valuation, further gains may require continued upward revisions to cloud and AI growth expectations. Microsoft: The Rerating Is Probably Over For Now About Microsoft (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
See Also Five stocks we like better than Microsoft 3 Financial Stocks Positioned for the Fed’s Next Move After Jackson Hole IREN’s AI Pivot Looks Real, But the Market Wanted a Faster Payoff After Earnings Boeing’s $131B F-15 Win: Mach 1 Momentum or Just Altitude? Okta Stock Surges 29%—Is $200 the Next Stop?
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Cardinal Capital Management Inc. raised its position in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 4.1% in the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 79,815 shares of the software giant’s stock after buying an additional 3,163 shares during the period. Cardinal Capital Management Inc.’s holdings in Microsoft were worth $29,773,000 as of its most recent filing with the Securities and Exchange Commission.
A number of other large investors have also bought and sold shares of MSFT. Longfellow Investment Management Co. LLC grew its holdings in Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after acquiring an additional 20 shares during the last quarter. Shepherd Kaplan Krochuk LLC raised its stake in shares of Microsoft by 4.9% in the third quarter. Shepherd Kaplan Krochuk LLC now owns 431 shares of the software giant’s stock worth $223,000 after acquiring an additional 20 shares during the last quarter. Fischer Investment Strategies LLC raised its stake in shares of Microsoft by 3.1% in the fourth quarter. Fischer Investment Strategies LLC now owns 697 shares of the software giant’s stock worth $337,000 after acquiring an additional 21 shares during the last quarter. Pollock Investment Advisors LLC lifted its position in shares of Microsoft by 0.8% during the third quarter. Pollock Investment Advisors LLC now owns 2,805 shares of the software giant’s stock worth $1,453,000 after purchasing an additional 21 shares in the last quarter. Finally, Better Money Decisions LLC lifted its position in shares of Microsoft by 0.6% during the second quarter. Better Money Decisions LLC now owns 3,498 shares of the software giant’s stock worth $1,740,000 after purchasing an additional 21 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors.
Analysts Set New Price Targets A number of brokerages recently weighed in on MSFT. The Goldman Sachs Group reissued a “buy” rating and issued a $640.00 price target on shares of Microsoft in a report on Thursday, July 30th. CLSA reiterated an “outperform” rating on shares of Microsoft in a research report on Thursday, July 30th. Wells Fargo & Company lifted their target price on Microsoft from $650.00 to $700.00 and gave the company an “overweight” rating in a research note on Wednesday, August 12th. Barclays dropped their target price on Microsoft from $545.00 to $512.00 and set an “overweight” rating for the company in a research report on Thursday, July 30th. Finally, Piper Sandler raised their price target on Microsoft from $540.00 to $550.00 and gave the company an “overweight” rating in a report on Tuesday, July 28th. Forty-two investment analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average price target of $560.27.
View Our Latest Stock Report on MSFT Insider Activity In other news, CEO Judson Althoff sold 15,500 shares of the firm’s stock in a transaction dated Monday, June 1st. The stock was sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the sale, the chief executive officer owned 110,477 shares of the company’s stock, valued at $50,928,792.23. This trade represents a 12.30% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total value of $2,388,068.80. Following the transaction, the executive vice president owned 42,677 shares in the company, valued at $21,188,276.96. This trade represents a 10.13% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 37,310 shares of company stock worth $17,256,219. Corporate insiders own 0.03% of the company’s stock.
Microsoft Stock Up 1.7% Shares of Microsoft stock opened at $513.53 on Friday. The business has a fifty day simple moving average of $430.87 and a 200 day simple moving average of $412.45. The stock has a market cap of $3.81 trillion, a PE ratio of 28.59, a price-to-earnings-growth ratio of 1.63 and a beta of 1.11. The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. Microsoft Corporation has a 12 month low of $349.20 and a 12 month high of $553.72.
Microsoft (NASDAQ:MSFT – Get Free Report) last released its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, topping the consensus estimate of $4.24 by $0.50. The business had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. Microsoft’s quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter last year, the firm earned $3.65 EPS. Research analysts predict that Microsoft Corporation will post 19.59 EPS for the current year.
Microsoft Announces Dividend The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be paid a dividend of $0.91 per share. This represents a $3.64 annualized dividend and a yield of 0.7%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio (DPR) is presently 20.27%.
Key Microsoft News Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Microsoft’s strong Azure and cloud performance helped drive a rally of roughly 48% from its June low, with the stock reaching a 10-month high and moving above a technical buy point. A recently formed “golden cross,” in which the 50-day moving average moved above the 200-day average, also supports bullish momentum. Bull v. Bear: MSFT Hits 2026 High, is a New Record Next? Positive Sentiment: Microsoft is reportedly in early discussions with Moonshot AI regarding its Kimi K3 model. A potential arrangement could add another AI service to Azure and create a new revenue stream, although negotiations are not finalized. MSFT Stock Alert: Moonshot Could Give Microsoft Another AI Revenue Stream Positive Sentiment: Microsoft’s deployment of more than 25 AI agents across its supply chain illustrates early enterprise use cases for agentic AI, including demand forecasting, freight routing and inventory management. Successful internal deployments could support broader adoption of Microsoft’s AI tools. Microsoft Puts 25 AI Agents to Work on Supply Chain Costs Positive Sentiment: Microsoft is spending heavily on AI infrastructure—approximately $175 billion this year—and has reassured employees that data-center investment is intended to support long-term growth. Azure reportedly surpassed $100 billion, while contracted backlog and commercial bookings remain major valuation supports. Microsoft Reassures Employees About AI Data Center Impacts Neutral Sentiment: Microsoft’s gains have helped lift major indexes, but the strength is concentrated in a few mega-cap technology stocks while small caps and many sectors weaken as bond yields rise. This creates a broader market-risk backdrop despite Microsoft’s relative strength. Dow Jones Futures: Microsoft, Titans Mask Market Weakness Negative Sentiment: One analyst argued that Microsoft’s valuation rerating may be largely complete for now, raising the risk of profit-taking after the recent monthly rally. At the current valuation, further gains may require continued upward revisions to cloud and AI growth expectations. Microsoft: The Rerating Is Probably Over For Now Microsoft Profile (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Featured Articles Five stocks we like better than Microsoft 3 Financial Stocks Positioned for the Fed’s Next Move After Jackson Hole IREN’s AI Pivot Looks Real, But the Market Wanted a Faster Payoff After Earnings Boeing’s $131B F-15 Win: Mach 1 Momentum or Just Altitude? Okta Stock Surges 29%—Is $200 the Next Stop?
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Canvas Wealth Advisors LLC increased its stake in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 13.1% in the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 82,424 shares of the software giant’s stock after purchasing an additional 9,568 shares during the quarter. Microsoft accounts for approximately 4.3% of Canvas Wealth Advisors LLC’s holdings, making the stock its 5th biggest position. Canvas Wealth Advisors LLC’s holdings in Microsoft were worth $30,746,000 at the end of the most recent reporting period.
Other hedge funds and other institutional investors have also recently bought and sold shares of the company. Longfellow Investment Management Co. LLC grew its stake in Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after acquiring an additional 20 shares during the last quarter. Bernzott Capital Advisors acquired a new position in Microsoft during the fourth quarter worth about $34,000. Timmons Wealth Management LLC acquired a new stake in shares of Microsoft in the fourth quarter valued at approximately $36,000. Fairway Wealth LLC grew its position in shares of Microsoft by 287.0% in the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after purchasing an additional 66 shares during the last quarter. Finally, LSV Asset Management purchased a new position in shares of Microsoft during the 4th quarter worth approximately $44,000. 71.13% of the stock is currently owned by hedge funds and other institutional investors.
Insiders Place Their Bets In related news, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the transaction, the executive vice president owned 42,677 shares in the company, valued at approximately $21,188,276.96. This trade represents a 10.13% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Judson Althoff sold 10,000 shares of Microsoft stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total value of $4,878,900.00. Following the completion of the transaction, the chief executive officer owned 100,447 shares in the company, valued at $49,007,086.83. The trade was a 9.05% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 37,310 shares of company stock valued at $17,256,219. Insiders own 0.03% of the company’s stock.
Key Headlines Impacting Microsoft Here are the key news stories impacting Microsoft this week: Positive Sentiment: Microsoft’s strong Azure and cloud performance helped drive a rally of roughly 48% from its June low, with the stock reaching a 10-month high and moving above a technical buy point. A recently formed “golden cross,” in which the 50-day moving average moved above the 200-day average, also supports bullish momentum. Bull v. Bear: MSFT Hits 2026 High, is a New Record Next? Positive Sentiment: Microsoft is reportedly in early discussions with Moonshot AI regarding its Kimi K3 model. A potential arrangement could add another AI service to Azure and create a new revenue stream, although negotiations are not finalized. MSFT Stock Alert: Moonshot Could Give Microsoft Another AI Revenue Stream Positive Sentiment: Microsoft’s deployment of more than 25 AI agents across its supply chain illustrates early enterprise use cases for agentic AI, including demand forecasting, freight routing and inventory management. Successful internal deployments could support broader adoption of Microsoft’s AI tools. Microsoft Puts 25 AI Agents to Work on Supply Chain Costs Positive Sentiment: Microsoft is spending heavily on AI infrastructure—approximately $175 billion this year—and has reassured employees that data-center investment is intended to support long-term growth. Azure reportedly surpassed $100 billion, while contracted backlog and commercial bookings remain major valuation supports. Microsoft Reassures Employees About AI Data Center Impacts Neutral Sentiment: Microsoft’s gains have helped lift major indexes, but the strength is concentrated in a few mega-cap technology stocks while small caps and many sectors weaken as bond yields rise. This creates a broader market-risk backdrop despite Microsoft’s relative strength. Dow Jones Futures: Microsoft, Titans Mask Market Weakness Negative Sentiment: One analyst argued that Microsoft’s valuation rerating may be largely complete for now, raising the risk of profit-taking after the recent monthly rally. At the current valuation, further gains may require continued upward revisions to cloud and AI growth expectations. Microsoft: The Rerating Is Probably Over For Now Microsoft Price Performance MSFT opened at $513.53 on Friday. The company’s 50 day simple moving average is $430.87 and its 200 day simple moving average is $412.45. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. Microsoft Corporation has a 1 year low of $349.20 and a 1 year high of $553.72. The stock has a market capitalization of $3.81 trillion, a PE ratio of 28.59, a P/E/G ratio of 1.63 and a beta of 1.11.
Microsoft (NASDAQ:MSFT – Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping the consensus estimate of $4.24 by $0.50. The firm had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. Microsoft’s revenue for the quarter was up 17.7% compared to the same quarter last year. During the same quarter in the prior year, the business posted $3.65 earnings per share. As a group, sell-side analysts expect that Microsoft Corporation will post 19.59 EPS for the current year.
Microsoft Dividend Announcement The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio is presently 20.27%.
Analysts Set New Price Targets MSFT has been the topic of a number of recent research reports. Wolfe Research reaffirmed an “outperform” rating and issued a $550.00 target price on shares of Microsoft in a research note on Thursday, July 30th. Stifel Nicolaus raised their price target on Microsoft from $400.00 to $450.00 and gave the stock a “hold” rating in a research report on Thursday, July 30th. Wells Fargo & Company boosted their price target on Microsoft from $650.00 to $700.00 and gave the stock an “overweight” rating in a report on Wednesday, August 12th. Evercore set a $528.00 price objective on Microsoft in a research report on Thursday, July 30th. Finally, BNP Paribas Exane decreased their price objective on Microsoft from $556.00 to $555.00 and set an “outperform” rating on the stock in a research note on Friday, May 1st. Forty-two equities research analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat, Microsoft currently has an average rating of “Moderate Buy” and an average price target of $560.27.
View Our Latest Stock Analysis on MSFT
About Microsoft (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Recommended Stories Five stocks we like better than Microsoft 3 Financial Stocks Positioned for the Fed’s Next Move After Jackson Hole IREN’s AI Pivot Looks Real, But the Market Wanted a Faster Payoff After Earnings Boeing’s $131B F-15 Win: Mach 1 Momentum or Just Altitude? Okta Stock Surges 29%—Is $200 the Next Stop?
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Dagco Inc. grew its holdings in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 14.7% in the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 15,361 shares of the software giant’s stock after acquiring an additional 1,973 shares during the period. Microsoft accounts for approximately 1.1% of Dagco Inc.’s investment portfolio, making the stock its 21st biggest holding. Dagco Inc.’s holdings in Microsoft were worth $5,730,000 at the end of the most recent quarter.
Other large investors also recently modified their holdings of the company. Longfellow Investment Management Co. LLC raised its stake in shares of Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after purchasing an additional 20 shares during the last quarter. Bernzott Capital Advisors bought a new stake in Microsoft in the fourth quarter worth about $34,000. Timmons Wealth Management LLC purchased a new position in shares of Microsoft during the 4th quarter valued at $36,000. Fairway Wealth LLC raised its position in shares of Microsoft by 287.0% in the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after purchasing an additional 66 shares during the period. Finally, LSV Asset Management purchased a new stake in shares of Microsoft during the fourth quarter worth $44,000. Institutional investors and hedge funds own 71.13% of the company’s stock.
Microsoft Stock Performance NASDAQ:MSFT opened at $513.53 on Friday. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The stock has a 50-day simple moving average of $430.87 and a two-hundred day simple moving average of $412.45. The firm has a market capitalization of $3.81 trillion, a PE ratio of 28.59, a P/E/G ratio of 1.63 and a beta of 1.11. Microsoft Corporation has a 52-week low of $349.20 and a 52-week high of $553.72.
Microsoft (NASDAQ:MSFT – Get Free Report) last released its earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. The company had revenue of $90.01 billion for the quarter, compared to analysts’ expectations of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. Microsoft’s revenue for the quarter was up 17.7% on a year-over-year basis. During the same quarter in the previous year, the company earned $3.65 EPS. Analysts forecast that Microsoft Corporation will post 19.59 EPS for the current year. Microsoft Announces Dividend The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be issued a $0.91 dividend. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.7%. Microsoft’s dividend payout ratio (DPR) is presently 20.27%.
Wall Street Analysts Forecast Growth A number of research analysts have recently commented on the stock. TD Cowen restated a “buy” rating and set a $540.00 price target on shares of Microsoft in a research report on Thursday, July 30th. Dbs Bank reduced their price objective on Microsoft from $678.00 to $573.00 in a research report on Thursday, May 7th. BNP Paribas Exane decreased their price objective on Microsoft from $556.00 to $555.00 and set an “outperform” rating on the stock in a report on Friday, May 1st. Tigress Financial increased their target price on Microsoft from $680.00 to $690.00 and gave the company a “buy” rating in a report on Wednesday, August 5th. Finally, Jefferies Financial Group restated a “buy” rating on shares of Microsoft in a report on Monday, May 4th. Forty-two investment analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average price target of $560.27.
Read Our Latest Stock Analysis on Microsoft
Microsoft News Roundup Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Microsoft’s strong Azure and cloud performance helped drive a rally of roughly 48% from its June low, with the stock reaching a 10-month high and moving above a technical buy point. A recently formed “golden cross,” in which the 50-day moving average moved above the 200-day average, also supports bullish momentum. Bull v. Bear: MSFT Hits 2026 High, is a New Record Next? Positive Sentiment: Microsoft is reportedly in early discussions with Moonshot AI regarding its Kimi K3 model. A potential arrangement could add another AI service to Azure and create a new revenue stream, although negotiations are not finalized. MSFT Stock Alert: Moonshot Could Give Microsoft Another AI Revenue Stream Positive Sentiment: Microsoft’s deployment of more than 25 AI agents across its supply chain illustrates early enterprise use cases for agentic AI, including demand forecasting, freight routing and inventory management. Successful internal deployments could support broader adoption of Microsoft’s AI tools. Microsoft Puts 25 AI Agents to Work on Supply Chain Costs Positive Sentiment: Microsoft is spending heavily on AI infrastructure—approximately $175 billion this year—and has reassured employees that data-center investment is intended to support long-term growth. Azure reportedly surpassed $100 billion, while contracted backlog and commercial bookings remain major valuation supports. Microsoft Reassures Employees About AI Data Center Impacts Neutral Sentiment: Microsoft’s gains have helped lift major indexes, but the strength is concentrated in a few mega-cap technology stocks while small caps and many sectors weaken as bond yields rise. This creates a broader market-risk backdrop despite Microsoft’s relative strength. Dow Jones Futures: Microsoft, Titans Mask Market Weakness Negative Sentiment: One analyst argued that Microsoft’s valuation rerating may be largely complete for now, raising the risk of profit-taking after the recent monthly rally. At the current valuation, further gains may require continued upward revisions to cloud and AI growth expectations. Microsoft: The Rerating Is Probably Over For Now Insider Buying and Selling at Microsoft In other news, EVP Takeshi Numoto sold 4,810 shares of the company’s stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the transaction, the executive vice president owned 42,677 shares of the company’s stock, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, CEO Judson Althoff sold 10,000 shares of the stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $487.89, for a total value of $4,878,900.00. Following the completion of the sale, the chief executive officer owned 100,447 shares in the company, valued at approximately $49,007,086.83. The trade was a 9.05% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 37,310 shares of company stock worth $17,256,219 in the last 90 days. 0.03% of the stock is currently owned by insiders.
About Microsoft (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Recommended Stories Five stocks we like better than Microsoft 3 Financial Stocks Positioned for the Fed’s Next Move After Jackson Hole IREN’s AI Pivot Looks Real, But the Market Wanted a Faster Payoff After Earnings Boeing’s $131B F-15 Win: Mach 1 Momentum or Just Altitude? Okta Stock Surges 29%—Is $200 the Next Stop? Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT – Free Report).
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Annex Advisory Services LLC cut its stake in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 1.5% in the second quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The firm owned 235,346 shares of the software giant’s stock after selling 3,595 shares during the quarter. Microsoft makes up approximately 1.5% of Annex Advisory Services LLC’s holdings, making the stock its 19th biggest position. Annex Advisory Services LLC’s holdings in Microsoft were worth $87,789,000 at the end of the most recent reporting period.
Several other hedge funds and other institutional investors also recently added to or reduced their stakes in MSFT. Longfellow Investment Management Co. LLC grew its holdings in Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after buying an additional 20 shares in the last quarter. Bernzott Capital Advisors purchased a new stake in shares of Microsoft during the 4th quarter worth approximately $34,000. Timmons Wealth Management LLC purchased a new stake in shares of Microsoft during the 4th quarter worth approximately $36,000. Fairway Wealth LLC boosted its position in shares of Microsoft by 287.0% during the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after acquiring an additional 66 shares during the last quarter. Finally, LSV Asset Management purchased a new position in shares of Microsoft in the fourth quarter valued at $44,000. 71.13% of the stock is owned by hedge funds and other institutional investors.
Analyst Ratings Changes Several equities research analysts recently weighed in on MSFT shares. Guggenheim restated a “buy” rating and issued a $586.00 price target on shares of Microsoft in a research report on Monday, July 27th. Arete Research lifted their price objective on shares of Microsoft from $730.00 to $870.00 and gave the stock a “buy” rating in a research note on Tuesday, May 5th. Oppenheimer restated an “outperform” rating and issued a $515.00 target price on shares of Microsoft in a report on Wednesday, July 22nd. Wells Fargo & Company upped their target price on shares of Microsoft from $650.00 to $700.00 and gave the company an “overweight” rating in a research report on Wednesday, August 12th. Finally, UBS Group set a $525.00 price target on shares of Microsoft in a report on Thursday, July 30th. Forty-two research analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average price target of $560.27.
Read Our Latest Analysis on MSFT Insider Activity In other Microsoft news, CEO Judson Althoff sold 10,000 shares of the firm’s stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the transaction, the chief executive officer owned 100,447 shares of the company’s stock, valued at approximately $49,007,086.83. This trade represents a 9.05% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, EVP Takeshi Numoto sold 4,810 shares of the business’s stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the completion of the sale, the executive vice president owned 42,677 shares of the company’s stock, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 37,310 shares of company stock valued at $17,256,219 over the last 90 days. 0.03% of the stock is currently owned by corporate insiders.
Microsoft Stock Up 1.7% Shares of NASDAQ MSFT opened at $513.53 on Friday. Microsoft Corporation has a 52-week low of $349.20 and a 52-week high of $553.72. The firm has a market capitalization of $3.81 trillion, a price-to-earnings ratio of 28.59, a PEG ratio of 1.63 and a beta of 1.11. The stock has a 50 day moving average price of $430.87 and a 200 day moving average price of $412.45. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23.
Microsoft (NASDAQ:MSFT – Get Free Report) last released its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping the consensus estimate of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The company had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. During the same period last year, the business posted $3.65 EPS. Microsoft’s quarterly revenue was up 17.7% on a year-over-year basis. Sell-side analysts expect that Microsoft Corporation will post 19.59 earnings per share for the current year.
Microsoft Announces Dividend The company also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. The ex-dividend date is Thursday, August 20th. This represents a $3.64 annualized dividend and a dividend yield of 0.7%. Microsoft’s dividend payout ratio (DPR) is currently 20.27%.
Microsoft News Roundup Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Microsoft’s strong Azure and cloud performance helped drive a rally of roughly 48% from its June low, with the stock reaching a 10-month high and moving above a technical buy point. A recently formed “golden cross,” in which the 50-day moving average moved above the 200-day average, also supports bullish momentum. Bull v. Bear: MSFT Hits 2026 High, is a New Record Next? Positive Sentiment: Microsoft is reportedly in early discussions with Moonshot AI regarding its Kimi K3 model. A potential arrangement could add another AI service to Azure and create a new revenue stream, although negotiations are not finalized. MSFT Stock Alert: Moonshot Could Give Microsoft Another AI Revenue Stream Positive Sentiment: Microsoft’s deployment of more than 25 AI agents across its supply chain illustrates early enterprise use cases for agentic AI, including demand forecasting, freight routing and inventory management. Successful internal deployments could support broader adoption of Microsoft’s AI tools. Microsoft Puts 25 AI Agents to Work on Supply Chain Costs Positive Sentiment: Microsoft is spending heavily on AI infrastructure—approximately $175 billion this year—and has reassured employees that data-center investment is intended to support long-term growth. Azure reportedly surpassed $100 billion, while contracted backlog and commercial bookings remain major valuation supports. Microsoft Reassures Employees About AI Data Center Impacts Neutral Sentiment: Microsoft’s gains have helped lift major indexes, but the strength is concentrated in a few mega-cap technology stocks while small caps and many sectors weaken as bond yields rise. This creates a broader market-risk backdrop despite Microsoft’s relative strength. Dow Jones Futures: Microsoft, Titans Mask Market Weakness Negative Sentiment: One analyst argued that Microsoft’s valuation rerating may be largely complete for now, raising the risk of profit-taking after the recent monthly rally. At the current valuation, further gains may require continued upward revisions to cloud and AI growth expectations. Microsoft: The Rerating Is Probably Over For Now About Microsoft (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
See Also Five stocks we like better than Microsoft 3 Financial Stocks Positioned for the Fed’s Next Move After Jackson Hole IREN’s AI Pivot Looks Real, But the Market Wanted a Faster Payoff After Earnings Boeing’s $131B F-15 Win: Mach 1 Momentum or Just Altitude? Okta Stock Surges 29%—Is $200 the Next Stop?
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Nvidia's (NVDA -4.58%) second-quarter 2027 (ended July 26, 2026) earnings report made the usual point in unusually large numbers. Data center revenue reached $89 billion during the quarter, up 18% from the prior quarter and 117% year over year. What I think matters more than the headline figure is the bifurcation inside that number.
Hyperscale customers generated $48.7 billion in revenue, up 13% sequentially and 102% from a year ago. The AI Clouds, Industrial, and Enterprise group (ACIE) generated $40.3 billion, an increase of 25% from last quarter and 138% year over year.
While big tech is still the largest buyer of Nvidia's systems, it is no longer the fastest growing. That shift changes how the AI story should be read.
Image source: Nvidia.
The hyperscalers form Nvidia's foundation The hyperscale bucket primarily revolves around the public cloud oligopoly: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). These companies aren't buying Nvidia's products as a hobby. They buy them because GPU clusters have become a scarce resource supporting training runs, large-scale inference deployments, and the rented capacity that developers consume.
Despite designing its own Trainium, Inferentia, and Graviton silicon, AWS remains one of Nvidia's largest customers. The reason is simple: Nvidia's GPUs and CPUs play a critical role in how start-ups, labs, and enterprises rent Blackwell and Rubin chips from cloud providers without owning their own facilities packed with liquid-cooled racks.
Azure has bound itself to this same stack. Microsoft's Copilot suite, OpenAI-related training, and Azure-OpenAI services all rely on Nvidia systems. This structure is unique, as it makes Microsoft both a customer of and a distribution channel for Nvidia.
Google Cloud also designs its own custom silicon, called Tensor Processing Units (TPUs). Even so, Alphabet still buys enormous quantities of Nvidia hardware. One reason why is that many customers want access to CUDA, Nvidia's software ecosystem that runs on top of its GPUs. This makes the ability to move AI workloads across clouds much more efficient. For now, Google's TPUs cannot serve that type of demand on its own.
Taken together, these three cloud hyperscalers form the floor supporting Nvidia's data center operation. By signing multiyear capacity plans they essentially turn Nvidia's racks into an infrastructure-as-a-service empire. When revenue from the hyperscalers more than doubles in a year, it is evidence that the largest buyers see returns on procuring more accelerators. It is not evidence, however, that the GPU market only has three buyers.
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How new adoption is becoming a big market for Nvidia Analyzing the results from the ACIE customers is where Nvidia's story gets more interesting. Nvidia describes this category as AI natives, enterprises, sovereign customers, and the specialist clouds -- neoscalers like CoreWeave and Nebius Group -- that sit between a hyperscaler and a data center. During the second quarter, this mix of customers grew almost twice as fast sequentially as hyperscale. Over the last year, it grew even faster.
This is unique because it shows that AI budgets are not recycled through the same three offices. An AI cloud is an emerging kind of intermediary, one that buys Nvidia's chips, packs them into clusters, and leases capacity to companies that never need to negotiate with a chip designer directly. Industrial and enterprise buyers are even different. Manufacturers running digital twins on the factory floor, a bank assessing risk, or a government designing a sovereign cluster is far more complex than a corporation simply increasing its operating budget to rent incremental storage on AWS.
This distinction is important because skeptics seem to think that the AI revolution is confined to Amazon, Microsoft, and Alphabet. This gives bears an excuse to call AI a circular trade. Cloud giants spend on GPUs so they can sell AI services whose customers are none other than frontier model developers. But when ACIE customers outgrow the hyperscalers, Nvidia's roster of buyers becomes larger. This proves that demand is moving beyond a small cohort of platform businesses to a broader class that also needs generative models for production use cases, not just for platform differentiators.
Most importantly, rising sales from ACIE dampens the AI bubble argument. A bubble story has to explain why Nvidia's non-hyperscale book is accelerating. A new class of buyers means the capex supercycle is developing a second demand curve, and second demand curves are how infrastructure booms wind up creating new industries.
Where is the best place to invest to capitalize on AI infrastructure? Don't get me wrong: this analysis is not to say that hyperscalers have become unimportant. AWS, Azure, and Google Cloud still remain the clearinghouses for much of the world's rented compute. Enterprise software names that are able to attach new AI-driven use cases to customer licenses will benefit if the ACIE demand is in fact real.
At the end of the day, hyperscalers still need Nvidia's systems to keep their AI products competitive. Neoscalers need GPUs and public clouds to exist to even have a viable business. Enterprises and sovereign governments rely on Nvidia's ecosystem spanning software, networking, and rack-scale design. This is all to say that accelerating ACIE growth shows how Nvidia's customer base is widening while the pick-and-shovel layer of capacity remains fairly concentrated.
Investors that fixate on the three cloud giants are stuck watching the first chapter of the AI narrative. Meanwhile, those watching enterprise software without asking who supplies the underlying compute are distracted by a third chapter that is still being written. The second chapter -- the one Nvidia's quarter actually highlights -- shines a light on the vendor that sells the AI factory to both. If AI adoption is truly broadening rather than looping, then Nvidia's scarce, high-margin systems will continue to be where evidence shows up first. In my eyes, that's what makes Nvidia such a no-brainer stock to buy and hold in the AI infrastructure era.
Microsoft delivered exceptional Q4 results, with Azure annual revenue surpassing $100 billion and growth accelerating to 43% year-over-year. MSFT funds its AI and cloud build-out entirely from robust free cash flows, distinguishing itself from peers facing negative or weaker cash generation. Cloud gross margins have declined for four quarters, and management forecasts modest operating margin compression in FY27, with stabilization catalysts emerging.
SummaryMicrosoft is projected to announce a 10–12% dividend increase, driven by robust revenue and EPS growth, reaching 24 consecutive years of payout hikes.MSFT's Productivity and Intelligent Cloud segments delivered 16% and 30% revenue growth, offsetting weakness in More Personal Computing.Despite heavy AI investments, MSFT maintains a compounded dividend growth rate near 10% over 3 and 5 years.September will also see anticipated double-digit dividend increases from Texas Instruments and Lockheed Martin, and milestone boosts from McDonald's and RPM. Microsoft 365 subscriptions have helped drive earnings growth at Microsoft. The company should announce its 25th year of dividend growth in September, making it eligible for inclusion in the S&P 500 Dividend Aristocrat index.
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Microsoft (MSFT +1.68%) has been nearly dead money so far in 2026. It's up around 4% year to date, but only thanks to a surge in recent days and months. Prior to the company reporting its earnings results for the fourth quarter of fiscal year 2026 (which ended June 30), the stock was down by more than 20% for the year. That quarterly report jump-started Microsoft's stock, but it's still down by more than 5% from the all-time high it established last year around this time.
Can Microsoft reach a new all-time high before 2026 is over? I think it can, and it's all because of Azure.
Image source: Getty Images.
Microsoft's cloud revenue growth is impressive Microsoft is one of the big four hyperscalers, and it has spent hundreds of billions of dollars in recent years on AI data centers. While it's not the biggest spender of the four, it has still been laying out a ton on capital expenditures, and the fruits of those investments are starting to show up in its results. Azure, Microsoft's cloud computing platform, saw revenue growth of 43% year over year in fiscal Q4.
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As more of Microsoft's new data centers come online, Azure's revenue will rise due to increased supply. There's a ton of demand out there right now for cloud computing power, and with Azure being one of the largest cloud computing providers -- it boasts a 21% market share -- it will benefit.
Microsoft's Copilot product is also being widely adopted, with over 30 million paid seats. All of this shows that Microsoft's AI plans are working out, which suggests that it's only a matter of time before the stock rises to a new all-time high.
Additionally, on a forward price-to-earnings basis, Microsoft's stock is trading below where it normally does. For the past three years, Microsoft has averaged a valuation of about 29 times forward earnings. Now, it trades for 25.6.
MSFT PE Ratio (Forward) data by YCharts.
If all Microsoft did was rise from its current valuation to its average one, the stock would rise by more than 10%, which would put it at a new all-time high. So, I think it's well within Microsoft's grasp to achieve a new record share price before 2026 is over, but is that a good enough reason to buy the stock?
Microsoft is a solid AI stock pick, but I think there are better ones out there. The time to buy Microsoft was in July, not now. I think there are several other stocks that are growing faster and are more attractive than Microsoft, and even though it's in line to set a new all-time high, I'm not sure whether it can deliver impressive returns after that. As a result, I'm passing on Microsoft and looking at other top AI stock picks instead.
Key Takeaways ServiceNow AI ACV topped $1B in Q2 2026, while net new AI ACV rose more than 40% sequentially.Agentic AI production customers rose ninefold, while $1M-plus AI deals tripled year over year.AI-native SKUs drive 20-30% price uplifts as non-seat-based business hits 50% of net new sales. ServiceNow (NOW - Free Report) is benefiting from accelerating adoption and monetization of its agentic artificial intelligence (AI) portfolio as enterprises increasingly automate complex workflows across IT, customer service, employee services and security. This momentum is strengthening NOW’s position in enterprise AI and enhancing its competitive standing against Microsoft (MSFT - Free Report) and Salesforce (CRM - Free Report) . ServiceNow AI annual contract value (ACV) crossed $1 billion in the second quarter of 2026, while AI net new ACV increased more than 40% sequentially. Management remains on track to exceed its $1.5 billion AI ACV target by the end of 2026.
Agentic AI deployment is broadening rapidly across ServiceNow’s installed base. The number of customers running Agentic AI in production increased ninefold over the past nine months, while the percentage of renewal customers purchasing Agentic AI for the first time doubled both sequentially and year over year. Deals incorporating five or more ServiceNow AI products grew 5.5 times year over year, resulting in a tripling of $1 million-plus AI deals. The company is already tracking ahead of its long-term target for AI to contribute 30% of ACV by 2030, strengthening visibility into future consumption growth.
Monetization is benefiting from new AI-native Stock Keeping Units (SKUs) and a broader pricing model. Deal volume among first-time Agentic AI buyers increased more than 45% year over year, while upgrades to new AI-native SKUs are generating price uplifts within ServiceNow’s targeted 20-30% framework. ServiceNow noted that 50% of net new business is already non-seat-based, reducing dependence on traditional seat expansion as autonomous agents become more prevalent. The company is preparing additional AI-native offerings, including a conversational service-desk experience with no tickets and AI-coded automation, which management said could expand its total addressable market.
The company is demonstrating tangible productivity and cross-selling benefits from autonomous AI. In the second quarter of 2026, more than 40 customers were using Level 1 Information Technology Service Management (ITSM) AI specialists, which were resolving roughly 80-85% of service requests without human interaction, with some requests falling from two days to about 20 minutes. AI adoption is driving demand for adjacent products. EmployeeWorks deal volume increased more than 150% quarter over quarter, RaptorDB Pro deal volume rose 80% year over year, and Workflow Data Fabric appeared in 17 of NOW’s top 20 deals. AI Control Tower, Otto, Autonomous Workforce, Context Engine and Action Fabric further extend governance, orchestration and autonomous actions across enterprise workflows.
NOW Faces Tough CompetitionMicrosoft and Salesforce are intensifying competitive pressure. Microsoft reported its fourth-quarter fiscal 2026 results on July 29, 2026, highlighting more than 100,000 Foundry customers and nearly 40 million agents registered through Agent 365 across tens of thousands of companies. Microsoft 365 Copilot exceeded 30 million paid seats, while the company is shifting toward seat-plus-consumption pricing. Usage-based customer-service credit consumption increased fourfold sequentially, while GitHub Copilot revenues accelerated more than 60% quarter over quarter.
Salesforce is similarly strengthening Agentforce. In its second-quarter fiscal 2027 results reported on Aug. 26, 2026, Agentforce ARR exceeded $1.5 billion, while Agentforce and Data 360 ARR reached nearly $3.9 billion. Salesforce is expanding AI monetization through premium SKUs and consumption-based offerings. Separately, on Feb. 26, 2026, Salesforce said more than 180 organizations had selected Agentforce IT Service, highlighting the growing competitive pressure on ServiceNow in IT service workflows.
NOW’s Share Price Performance, Valuation & EstimatesShares of ServiceNow have declined 17.9% year to date against the broader Zacks Computer and Technology sector’s 15.4% growth.
NOW’s Stock Price Performance
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NOW shares are trading at a premium, with a forward 12-month price/earnings ratio of 26.98X compared with the broader sector’s 20.82X. ServiceNow has a Value Score of D.
NOW’s Valuation
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The Zacks Consensus Estimate for NOW’s 2026 earnings is currently pegged at $1.03 per share, unchanged over the past 30 days, suggesting 7.29% year-over-year growth.
Key Takeaways Quantinuum and QCi stand out as pure-play stocks exposed to quantum commercialization.Quantinuum's Q2 revenues surged 279% YoY, with $2.1B in cash and short-term investments.QCi advances AI-quantum convergence with NeuraWave and Fab 2, while revenue rises to $5.6 million. NVIDIA’s (NVDA - Free Report) $108 billion revenue forecast does more than extend the AI spending story. It also points to the broader infrastructure investment that could support the next phase of quantum computing. NVIDIA expects fiscal 2027 third-quarter revenues of $108 billion, plus or minus 2%, after fiscal second-quarter revenues surged 106% year over year. Data Center revenues rose 117%, supporting the scale of ongoing investment in accelerated computing.
That largely matters for quantum stocks because quantum computing is increasingly being developed as a hybrid extension of classical accelerated computing, rather than a standalone replacement for GPUs. NVIDIA’s NVQLink architecture is designed to connect quantum processors with CPUs and GPUs, while its Accelerated Quantum Research Center integrates quantum hardware with NVIDIA supercomputing infrastructure.
Against this backdrop, two pure-play quantum stocks, Quantinuum (QNT - Free Report) and Quantum Computing Inc. (QUBT - Free Report) or QCi, stand out for their exposure to the sector’s commercialization push.
AI-Quantum Convergence Gains MomentumNVIDIA’s bullish fiscal 2027 forecast comes as the four largest hyperscalers, Alphabet (GOOGL - Free Report) , Amazon, Microsoft (MSFT - Free Report) and Meta, are expected to spend more than $730 billion on AI infrastructure in 2026, according to Reuters. This scale of investment is relevant to quantum computing because NVIDIA is developing infrastructure that connects quantum processors with GPUs and other accelerated-computing systems, pointing toward a more integrated AI-quantum computing model.
The quantum industry is also attracting substantial capital. McKinsey estimates that investment in quantum-technology startups reached $12.6 billion in 2025, up 6.3 times from 2024, with 90% directed toward quantum-computing companies.
Government policy is also becoming more supportive. The White House’s June 22 quantum executive order called for accelerating quantum capabilities for commercial applications and developing the resources needed for a powerful U.S. quantum computer.
However, the investment backdrop remains challenging for speculative technology stocks. U.S. real GDP expanded at a 1.5% annualized rate in the second quarter, down from 2.1% in the first quarter, while July CPI rose 3.4% year over year, keeping inflation above the Federal Reserve’s 2% target (Bureau of Economic Analysis). The Fed kept the federal funds target range at 3.5%-3.75% on July 29.
With growth moderating while inflation remains elevated, investors may place greater emphasis on revenue traction, cash resources and credible commercialization paths when evaluating quantum stocks.
NVIDIA's AI Forecast Puts 2 Quantum Stocks in FocusQuantinuum: It is a founding collaborator on NVIDIA’s Accelerated Quantum Research Center and has supported NVIDIA’s CUDA-Q platform since 2022. More recently, QNT announced an Oracle partnership to deploy Helios through Oracle Cloud Infrastructure alongside HPC and GPU infrastructure, targeting hybrid quantum-AI workloads. Second-quarter revenues jumped 279% YoY, while the company ended June with $2.1 billion in cash and short-term investments, supporting further commercialization.
This Zacks Rank #3 (Hold) stock’s average price target of $97.17 represents an increase of 82.34% from the last closing price of $53.29.
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QCi: The company offers a relevant link to the AI-quantum convergence through its photonic computing and semiconductor manufacturing strategy. Its NeuraWave platform is designed for real-time, energy-efficient AI inference at the edge and QUBT brought it to commercial readiness in the second quarter. QCi also completed its NHanced Semiconductors acquisition, launching Fab 2 to expand advanced packaging and semiconductor manufacturing. Second-quarter 2026 revenues rose to $5.6 million from $61,000, while cash, cash equivalents and investments totaled $1.3 billion at June-end.
This Zacks Rank #3 stock’s average price target of $18.33 represents an increase of 119.5% from the last closing price of $8.35. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microsoft NASDAQ: MSFT is seeing enterprise customers move beyond artificial intelligence experimentation toward broader production deployments centered on governance, scalable infrastructure and measurable business outcomes, according to Bill Duff, corporate vice president and CFO of Global Commercial Sales and Marketing, speaking at the Deutsche Bank Technology Conference.
Key Takeaways NVIDIA's results were again mighty impressive, showing huge growth. The release wrapped up the reporting cycle for the Mag 7 group as a whole. Other members, including MSFT and AAPL, similarly posted strong results. With NVIDIA (NVDA - Free Report) finally delivering its results, we’ve now heard from the entire Magnificent Seven group this earnings cycle. The release again reflected one of the most important of the period, with its results similarly reflecting the final hurdle of the broader Q2 earnings season.
Growth as a whole for the Mag 7 group in the Q2 cycle was stellar, though it’s worth remembering that the growth rates did benefit in a huge way from an unrealized gain on Alphabet’s SpaceX stake.
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NVIDIA EarningsNVIDIA delivered another blowout quarter, with its recent results comfortably clearing already high expectations. Revenue surged 106% year over year to $96.2 billion, whereas adjusted EPS jumped 120% to $2.22. Both items cleared our consensus expectations, reflecting the AI-favorite’s fifth consecutive double-beat.
Unsurprisingly, Data Center remained the highlight of the release again. Data Center revenue totaled $89.0 billion, up a triple-digit 117% year over year and 18% sequentially, handily clearing our consensus estimate of roughly $85.1 billion.
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CEO Jensen Huang said demand is accelerating as more frontier AI labs, startups, and enterprises scale computing infrastructure, with its next-generation Vera Rubin platform now in full production. Simply put, the AI spending boom remains alive and well, with NVIDIA firmly planted at the center of it.
The stock maintains a favorable Zacks Rank #2 (Buy), with EPS revisions expected to remain on a bullish trajectory following the favorable release. Overall, the stock continues to reflect one of the strongest bets on the continued AI craze, underpinned by red-hot demand that isn’t going to slow anytime soon.
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Other Record-Breaking Mag 7 ResultsApple’s (AAPL - Free Report) results this earnings season reflected its strongest June-quarter period ever, with quarterly revenue of $109.4 billion growing 16% year-over-year. Adjusted EPS came in at $2.02, growing an even stronger 29% from the year-ago period.
Apple also reported double-digit revenue growth across iPhone, Mac, and Services, with similar gains in every geographic segment. Its installed base of active devices also reached an all-time high across its major product categories.
As usual, the iPhone reflected the mega-cap tech giant’s biggest source of revenue, with sales coming in at $54.3 billion and growing by 21.6% year-over-year.
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Microsoft (MSFT - Free Report) similarly posted strong results this earnings cycle, with sales growing 18% YoY and earnings growing 23% YoY. Notably, Microsoft delivered favorable Intelligent Cloud results, a key benchmark that has been under a magnifying glass amid the billions it’s been investing in AI infrastructure.
Microsoft’s Intelligent Cloud results include Azure, its cloud computing platform that provides AI computing power to businesses. Intelligent Cloud revenue came in at $39.3 billion, beating our consensus estimate handily and growing 32% YoY. The growth rate here is mightily important from a sentiment standpoint, showing an acceleration relative to recent periods.
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Bottom Line
NVIDIA (NVDA - Free Report) capped off the reporting cycle for the beloved Magnificent Seven group, whose results again proved the AI frenzy remains healthy and well. Several other members of the group, including Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) , similarly posted strong results, though AAPL shares did face pressure following its release.
That said, all three remain top-tier stocks, with their cash-generating capabilities largely unmatched.
When Bank of America chief investment strategist Michael Hartnett pinned the "Magnificent Seven" name on a group of megacap companies back in 2023, those giants were in fact the most dominant tech stocks in the market. In order of their market caps today, they are:
Nvidia (NVDA -4.58%) Apple (AAPL +1.63%) Alphabet (GOOG +1.53%) (GOOGL +1.74%) Microsoft (MSFT +1.68%) Amazon (AMZN +3.97%) Meta Platforms (META +1.21%) Tesla (TSLA -1.71%) These seven companies have remained dominant, but other tech players have risen into powerful positions since this grouping was formulated.
One that many investors are curious about is Space Exploration Technologies (SPCX +0.45%), better known as SpaceX. SpaceX went public in June, and is already making waves with its rapidly growing businesses and exciting technology.
If a Wall Street guru like Hartnett was looking to pick a fresh seven-stock group of tech powerhouses that could accurately be described as leading Wall Street now, which current Magnificent Seven stock might get kicked out to make room for SpaceX? The answer may surprise you.
Image source: Getty Images.
Here are the six that would stay The knee-jerk reaction would be to kick Tesla out, as it has struggled in recent years due to falling margins and inconsistent sales volumes. It's also the smallest by market cap now. However, I think Tesla is still an important member of the Magnificent Seven, as it gives the group exposure to a different consumer segment. If Tesla can fully deploy full self-driving capabilities for its electric vehicles, it will contribute a unique spin to the Magnificent Seven, making it worthy of remaining in the group.
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I'd also keep Apple, Alphabet, Amazon, and Microsoft. These four companies are staples in the group and give it exposure to both consumer and business spending trends.
Nvidia, as the largest company in the world, is the closest stock in the group to an AI pure-play pick, and is still achieving phenomenal growth.
That leaves just one stock in position to get the boot: Meta Platforms.
SpaceX and Meta Platforms have a business in common Meta Platforms and SpaceX actually have a fair bit of business model overlap. Meta Platforms' operations are mostly centered around its social media platforms and the advertising revenue it derives from them. Meta is also sinking billions of dollars into its AI capabilities, looking to release consumer products like glasses that can take AI from the computer screen to the real world. While its AI endeavors are exciting, Meta really doesn't have anything to show for them right now.
SpaceX is doing a lot of the same things. It has a social media platform, X (formerly known as Twitter), thanks to xAI's acquisition of X and then SpaceX's acquisition of xAI.
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xAI also has the Grok large language model, which competes against some of Meta's models. This places Meta in direct competition with SpaceX, but there are some other businesses that SpaceX brings to the table that aren't currently represented through the tech companies in the Magnificent Seven.
It has a satellite internet connectivity business thanks to its Starlink service, and also has a rocket launching unit. None of these are currently represented in the Magnificent Seven, but both are exciting parts of society today that could be even bigger in the future. If SpaceX can build a viable space transportation business, it would easily be as important a business as any in the Magnificent Seven, and because it covers Meta's bases, it would be a solid replacement.
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If Meta can deliver a solid AI glasses business with a thriving subscription model and a must-have product, then I think Meta could make a case to remain included in a "new" Magnificent Seven over Apple, as the iPhone maker's technology launches have been fairly stagnant over the past few years. We'll see how the Magnificent Seven progresses over the next few years. Still, if SpaceX continues on its current trajectory, then there may be a case to define a new group of tech sector leaders that includes it by the end of the decade.
Keithen Drury has positions in Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
Checking in on what the smart money is doing with stocks is a great way to source new ideas or challenge ideas that you have. One interesting move that billionaire Bill Ackman made at Pershing Square Capital Management was selling Amazon (AMZN +3.97%) and buying Microsoft (MSFT +1.68%) in the second quarter.
Pershing decreased its Amazon stake by over 25% in Q2, while increasing its Microsoft stake by nearly 10%.
That's a definitive rebalancing of his portfolio, but is that still the right move for investors? Let's take a look.
Pershing Square Capital Management CEO Bill Ackman. Image source: Getty Images.
The landscape has shifted since Q2 wrapped up Investors only have access to Ackman's moves thanks to a Form 13F filing, which requires funds with more than $100 million in assets to file their end-of-quarter holdings with the SEC. That information is then given to the public 45 days later, so it could include some outdated information that's no longer accurate. That's why it's prudent to analyze what has happened over the past month and a half before blindly following a hedge fund's moves.
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Both Amazon's and Microsoft's stocks have done very well since Q2 ended, both boosted by strong earnings reports that sent shares skyrocketing the day after earnings. Since Q2 ended, Microsoft is up an impressive 30%, while Amazon is up around 10%. Those are big moves in just a few weeks, and completely change how investors view these two as investments.
So, just because Ackman bought Microsoft and sold Amazon during Q2 doesn't mean he isn't reversing that trade right now. Is Microsoft still the best buy between the two?
Q2 results favor Amazon During Q2, Microsoft and Amazon each reported blowout quarters, but I think one company's results stand out above the other's.
Amazon's overall growth rate during Q2 was 20%, and its operating income increased by 43%. This was heavily influenced by Amazon Web Services (AWS) delivering better-than-expected results, but that trend will likely continue as Amazon is pouring $220 billion into data center capital expenditures in 2026.
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Microsoft operates on a different fiscal calendar, and its results for the fourth quarter of fiscal year 2026 (ended June 30) were also good, but not quite as strong. Microsoft's revenue rose 18% year over year, with earnings income rising the same 18%. Those results clearly favor Amazon, and it's likely that this differential will persist for some time.
Microsoft didn't adjust its capital expenditure guidance, but Amazon raised its outlook. Amazon is also spending far more than Microsoft on data centers, and if it can find clients for this increased demand, it will lead to further AWS revenue growth.
From a valuation perspective, both companies' price-to-earnings (P/E) ratios were influenced by one-time gains on investments. So, I'll value each company based on its operating income instead.
AMZN Operating PE Ratio data by YCharts
Amazon holds a decent premium to Microsoft, making it seem like the far better deal. However, this is only looking at trailing earnings and fails to factor in the growth rate.
Amazon's operating income is growing at a far faster rate because Amazon's cloud computing segment, Amazon Web Services (AWS), accounts for 60% of the company's operating income. In Q2, AWS' operating income rose at a 64% year-over-year pace. When a division's operating income is growing that fast and makes up the majority of the company's total, it leads to outsize growth that can send stocks soaring.
Because of this trend, I think Amazon's stock is actually cheaper than Microsoft's, as its growth will vault it ahead over the next few years. With that in mind, I think Amazon is the far better buy over Microsoft right now, as the data center build-out trend isn't going to wrap up anytime in the near future.
Ken Griffin is one of the best-known investors in the world, having founded the hedge fund Citadel Advisors in 1990 and turnng it into one of the world's largest investment firms. Citadel currently has about $77 billion in assets under management and is one of the most profitable hedge funds of all time based on net gains since inception.
Citadel has a vast portfolio with more than 6,500 holdings, so it's interesting to get a glimpse of which companies it's most bullish on and which it's selling. One thing that I'm struck by from the most recent Form 13F with the Securities and Exchange Commission is a shift in Griffin's artificial intelligence (AI) investing strategy.
Citadel founder and CEO Ken Griffin. Image source: Getty Images.
Griffin sold 6.8 million shares of Nvidia stock in the second quarter, lowering Citadel's exposure by 36%. And he sold nearly 11% of his Broadcom stock (356,000 shares) and 4 million shares of Micron Technology (87% of Citadel's shares).
In the same quarter, he added to Citadel's position in two key AI stocks that are proving to be early winners in the "show-me" phase of the AI build-out. Those companies are Amazon (AMZN +3.97%) and Microsoft (MSFT +1.68%), both of which are top five holdings in Citadel's portfolio.
Let's look at what Amazon and Microsoft are doing well and possibly why they've attracted Griffin's attention.
Citadel Top Five Holdings
Percentage of Portfolio
Shares Owned
Value
Q2 Activity
iShares Core S&P 500
7.6%
17.7 million
$13.2 billion
Purchased 13.6 million shares
Amazon
1.49%
10.9 million
$2.6 billion
Purchased 2.8 million shares
Nvidia
1.36%
11.8 million
$2.4 billion
Sold 6.8 million shares
Apple
1.21%
7.3 million
$2.1 billion
Bought 2.1 million shares
Microsoft
0.81%
3.8 million
$1.4 billion
Bought 1.1 million shares
Data source: Hedgefollow.com. Data as of June 30, 2026.
Amazon's AI investments are paying off I'll confess -- I wasn't hugely bullish on Amazon at the beginning of the year. I ranked it near the bottom of my list of best "Magnificent Seven" stocks to buy because I thought the skimpy profit margins on the e-commerce side of the business would drag Amazon stock down this year.
But Jeff Bezos and Andy Jassy showed they know what they're doing. Amazon Web Services recorded its fastest growth in more than four years, and the company's AI business topped an annual run rate of $25 billion. In addition, Amazon's chips business, which includes custom-built Trainium AI chips that Amazon is using as an alternative to Nvidia GPUs, also achieved a $25 billion annual run rate.
Amazon's revenue in the quarter topped $200 billion, up nearly 20% from a year ago, and AWS generated $16.6 billion in operating income, which was up from $10.2 billion a year ago.
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Microsoft is building an AI powerhouse while staying cash-positive One of the biggest challenges for big tech companies right now is paying billions for data centers, hardware, and connectivity to build out AI infrastructure without going deep into debt. Major hyperscalers have committed to spending $760 billion this year and are expected to increase that to more than $1 trillion next year.
Microsoft is one of those spending a lot -- it projected it would pay $175 billion this calendar year -- but so far, it's managing to thread the needle. The company reported in its most recent earnings report (for the fourth quarter of fiscal 2026 ended June 30) that it had $19.6 billion in free cash flow. Even better, the company expects to remain free cash flow positive in fiscal 2027.
Overall revenue was $90 billion, up 18% from a year ago, and Microsoft Azure topped $100 billion in revenue for the fiscal year for the first time.
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Citadel's AI bets are paying off Even though Griffin and Citadel sold Nvidia, Micron, and Broadcom in the quarter, Griffin is far from bearish on AI in general. After all, Nvidia is still a top-five holding.
However, Amazon and Microsoft's success in their most recent quarters shows that the market is rewarding companies that are demonstrating results in their AI spending. And Citadel's Q2 purchases have paid off nicely, as Amazon and Microsoft are up 15% and 27%, respectively, since reporting earnings in late July.
Tesla, Microsoft and Oracle stocks push higher ahead of the Fed speech, with TSLA testing its 50-day EMA, MSFT above $500 and ORCL eyeing $160.
In this article:TSLA
-1.71%
MSFT
+1.68%
ORCL
-0.72%
TSLA Technical Analysis
Tesla is holding at the $350 level with the 50-day EMA just above and the 200-day EMA declining near $381. Source: TradingView. The pre-market trading for Tesla is a bit positive, and we’ll have to see whether or not that actually leads to further upward momentum with the 50-day EMA sitting just above. Ultimately, this is a market that has been noisy for a while, and with that being the case, I think we have to look at this as a situation where we are trying to build up that necessary momentum. And of course, the Kevin Warsh speech late in the day will give traders an idea as to what the Federal Reserve does, which has an influence on these tech stocks.
A breakdown from here below the $340 level could get things bearish again, but so far at least in the day, it looks like the buyers are trying to make a statement.
MSFT Technical Analysis
Microsoft has broken above $500, trading well above both the 50-day and 200-day EMAs in a broader uptrend. Source: TradingView. Microsoft looks a little bit positive in pre-market trading as well, and ultimately, this is a market that has been bullish for a while. Looks like we’re trying to continue that as we are now back above the $500 level. Short-term pullbacks offer buying opportunities for those who would wish to get involved again. We’ll just have to see if that actually plays out, but it certainly looks like the buyers are intact and pushing to the upside. I’m personally watching the $477 region if we do get some type of pullback later in the day due to that speech.
ORCL Technical Analysis Oracle is climbing back toward the 50-day EMA near $148, with the $160 area as the next resistance and the 200-day EMA declining above at $171. Source: TradingView. Oracle looks like it is trying to make a move as well. It is slightly positive. More likely than not, one would think that the $160 region might have a little bit of a wiggle there as it was a recent swing high, but Oracle looks like it is trying to turn things around.
Nice price action, but noisy. We are still worried about a lot of things, including the Federal Reserve and the whole idea that maybe AI has a credit problem. Obviously, Oracle in the network part of the scenario could be affected, but it looks like the market’s willing to look past that, and the buyers are starting to return to a lot of these stocks.
If you’d like to know more about technical analysis and how traders use it, please visit our educational area.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.
Microsoft Corp (NASDAQ:MSFT) is already running AI workloads on IREN’s infrastructure. NVIDIA Corp (NASDAQ:NVDA) has now validated another layer of its platform. But according to co-CEO Daniel Roberts, those milestones point to a bigger story: in the AI infrastructure race, owning the entire stack — not just the chips — could become the industry’s defining advantage.
• IREN shares are sliding. What’s weighing on IREN shares?
Speaking on IREN’s fiscal 2026 earnings call, Roberts argued that the company’s strategy extends far beyond acquiring Nvidia GPUs. Instead, he said IREN is building a vertically integrated AI infrastructure platform spanning power, data centers, compute and software — an approach he believes creates more value than relying on third-party providers for critical pieces of the stack.
Microsoft and Nvidia Reinforce IREN’s AI Stack StrategyIREN highlighted a series of milestones that underscore that strategy.
The company said Horizon 1 — the first of four planned 50-megawatt AI cloud deployments under its Microsoft contract — was delivered during the quarter. Roberts also noted that the company’s 2026 contracted annual recurring revenue has reached $4 billion, with $1 billion already operational, while another $700 million of ARR tied to its Nvidia Cloud contract is expected to ramp in 2027.
On the software side, Roberts pointed to another milestone announced alongside the earnings release.
“Just today, Mirantis was named an inaugural Nvidia Certified Hypervisor. So we’ve now got Nvidia validation at the software layer as well as the hardware.”
Mirantis, which IREN recently acquired, enables the company to offer managed AI cloud services alongside bare-metal GPU infrastructure, expanding the range of customers it can serve.
Read Next
IREN CEO Says Owning Every Layer Creates More ValueFor Roberts, the Microsoft deployment and Nvidia software certification illustrate a broader investment thesis rather than isolated achievements.
“Why own all three?” he asked, referring to infrastructure, GPUs and software.
“Because each layer makes the one underneath it worth more. A grid connection is worth more with a data center on it. Worth more again with GPUs inside. More again with services wrapped around the customer.”
He contrasted IREN’s approach with much of the broader AI infrastructure market.
“Most of this market rents at least one of those layers; we own the entire stack.”
Management argued that vertical integration gives IREN greater flexibility to serve different customer types, from hyperscalers seeking bare-metal GPU clusters to enterprise AI developers that require managed cloud services and orchestration software.
The Mirantis acquisition also opens the door to new offerings such as on-demand AI compute and managed services, complementing the company’s long-term cloud infrastructure contracts.
What Investors Should WatchThe AI infrastructure story has largely centered on access to Nvidia’s latest chips. IREN’s latest earnings call suggests management believes the competitive landscape is shifting toward a broader question: who owns the infrastructure surrounding those GPUs.
That thesis is now supported by tangible milestones. Microsoft has begun taking delivery under its AI cloud agreement, Nvidia has validated IREN’s software layer through Mirantis, and management says each additional layer strengthens the economics of the one below it.
For investors, the next test will be whether that vertically integrated model translates into sustained customer growth, expanding margins and higher-value AI cloud contracts as demand continues to scale.
After reaching an important support level, Microsoft Corporation (MSFT - Free Report) could be a good stock pick from a technical perspective. MSFT recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.
There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, since bigger time periods tend to form stronger breakouts.
There are three stages to a golden cross. First, there must be a downtrend in a stock's price that eventually bottoms out. Then, the stock's shorter moving average crosses over its longer moving average, triggering a positive trend reversal. The third stage is when a stock continues the upward momentum to higher prices.
A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.
Over the past four weeks, MSFT has gained 12%. The company currently sits at a #3 (Hold) on the Zacks Rank, also indicating that the stock could be poised for a breakout.
The bullish case only gets stronger once investors take into account MSFT's positive earnings outlook for the current quarter. There have been 13 upward revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.
Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on MSFT for more gains in the near future.
Azure just crossed $100 billion and commercial bookings are stacking up at a pace that redefines what valuation ceiling even means for a company this size. The math toward an unprecedented market cap milestone is closer than most investors realize.
Microsoft is once again flirting with mega-cap history. With a market capitalization of $3.74 trillion and Azure now a $100 billion business, the path to a $5 trillion valuation is now a math problem.
Microsoft (NASDAQ:MSFT | MSFT Price Prediction) trades at $503.92 as I write this. Our 24/7 Wall St. price target for Microsoft is $599.92, implying 18.9% upside over the next 12 months. That would push the market cap right to the doorstep of $5 trillion. Our recommendation is buy, with high confidence at 90%.
24/7 Wall St. Price Target Summary Metric Value Current Price $503.92 24/7 Wall St. Price Target $599.92 Upside 18.9% Recommendation BUY Confidence Level 90% A Blowout Fiscal Year Reset the Story MSFT is up 27.81% over the past month and 3.29% year to date, recovering from an early-2026 drawdown that briefly took shares below $400. The 52-week range runs from $348.54 to $549.20.
The catalyst for the rebound was the July 29 earnings report: Q4 FY26 revenue of $90.01 billion (up 17.75%), non-GAAP EPS of $4.74 beating by 11.81%, and Azure growth of 43%. Commercial RPO ballooned to $678 billion, up 84%, giving investors unprecedented forward visibility.
Why Bulls See a Breakout Ahead The bull case is straightforward: demand exceeds supply. Amy Hood said flatly, “Demand continues to exceed available supply.” Microsoft guided Q1 FY27 Azure growth to roughly 45% in constant currency. Microsoft 365 Copilot now has 30 million paid seats, with net additions more than doubling sequentially.
GitHub Copilot has 50 million users, and its revenue accelerated over 60% quarter over quarter after the shift to usage-based billing. Our bull-case scenario points to $625.15, a 23.9% return that would clear the $5 trillion mark decisively.
What Could Go Wrong The bear case centers on capital intensity. FY26 CapEx hit $115.95 billion, and free cash flow fell 6.46%. More Personal Computing revenue declined 4%. Insider activity is characterized as selling.
Bulls will counter that Hood explicitly framed CapEx as flexible, noting that “if the demand environment changes, you just slow down” the short-lived GPU and CPU spend that drives most of the outlay. Our bear case sits at $514.05, essentially flat.
How Microsoft Compares to Alphabet and Amazon Alphabet (NASDAQ:GOOGL) is the sharpest hyperscaler valuation contrast. Google Cloud grew 82% in Q2 2026, faster than Azure, yet Alphabet trades at a P/E of just 15 versus Microsoft’s 28. Alphabet already sits at a $4.18 trillion market cap. That gap suggests Microsoft carries a premium for enterprise stickiness, but it also caps how much multiple expansion can carry MSFT to $5 trillion.
Amazon (NASDAQ:AMZN) sits at a $2.76 trillion market cap with AWS growing 37% at a 39.4% operating margin. Amazon’s P/E of 36 and price-to-free-cash-flow of 365 make Microsoft’s multiples look reasonable given MSFT’s 46.78% operating margin.
Company P/E Operating Margin Microsoft 28 46.78% Alphabet 15 32.03% Amazon 36 11.16% The peer set makes our $599.92 target look reasonable rather than aggressive.
Microsoft Price Prediction 2026-2030 Our 24/7 Wall St. price target is $599.92, a buy at 90% confidence. The tipping factor is the $678 billion RPO backlog, which converts supply constraint into visible revenue.
The bullish thesis holds if Azure sustains 40%+ growth into FY27 as guided. Caution is warranted if CapEx crosses $150 billion without matching bookings.
Year 24/7 Wall St. Price Target 2026 $545.22 2027 $606.30 2028 $671.50 2029 $732.01 2030 $825.32 These projections assume Microsoft sustains double-digit revenue growth and disciplined AI infrastructure returns. Significant deviation could come from AI monetization outperformance or a broader hyperscaler CapEx reset (the same buildout that powers our free report on seven non-chip stocks riding the AI infrastructure wave).
Contact [email protected] for any questions or corrections.
Cloud computing has steadily emerged as one of the most compelling secular growth trends in the technology sector, enabling enterprises to operate more efficiently, accelerate innovation and strengthen their competitive position. Greater flexibility, scalability, accessibility and cost efficiency have driven widespread cloud adoption across industries. By leveraging virtualization technology, cloud computing has played a pivotal role in advancing digital transformation. It allows businesses to access, manage and store data over the Internet without relying heavily on physical servers or complex on-premises IT infrastructure.
Cloud platforms also enable multiple users to share computing resources through web browsers or dedicated applications, improving resource utilization and operational efficiency. Moreover, cloud-based solutions have helped businesses deliver seamless omnichannel customer experiences while keeping infrastructure and operating costs under control.
Given its expanding role in enterprise technology spending and digital transformation, cloud computing has also become an attractive investment theme for investors seeking exposure to leading technology companies. Prominent players such as Alphabet Inc. (GOOGL - Free Report) , Microsoft Corporation (MSFT - Free Report) , Amazon.com, Inc. (AMZN - Free Report) and Arista Networks, Inc. (ANET - Free Report) are well-positioned to benefit from the continued growth of cloud infrastructure and related technologies. Before taking a closer look at these stocks, let us examine the key factors that are encouraging enterprises to increasingly shift their workloads and IT operations to the cloud.
Based on a pay-per-use pricing model, enterprises only pay for the computing resources they use. This has helped business enterprises reduce operating costs for maintaining on-site data centers and deploying IT experts to manage the infrastructure, making it a highly cost-effective solution. With easy access to a plethora of innovative technologies, cloud computing increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale. Moreover, cloud computing services are delivered over a highly secure network with low latency for applications and data backup facilities for improved reliability.
Cloud computing services fall into four broad categories – infrastructure as a service (IaaS), platform as a service (PaaS), serverless / function as a service (FaaS) and software as a service (SaaS) – each offering different levels of control, flexibility and management options to business enterprises. Cloud computing, which relies heavily on virtualization and automation technologies, provides the requisite infrastructure for AI (artificial intelligence) and machine learning (ML) workloads. It delivers powerful computing abilities to process and analyze data, creating an ideal platform for Big Data management.
Per Grand View Research, the global cloud computing market size is expected to swell to $3,349.6 billion by 2033 from $943.7 billion in 2025 at a CAGR of 16% with a variety of capabilities across multiple industries. These include diverse use cases such as improved patient monitoring and outcomes in healthcare, personalized financial management and predictive spending, immersive learning in education, superior inventory management in retail and predictive maintenance and better supply chain management in the manufacturing sector.
If you intend to capitalize on this buzzing trend, our Cloud Computing Thematic Investing Screen could make it easy to identify high-potential stocks in this domain at any given time, just like the four mentioned above. By leveraging advanced tools, our thematic screens identify companies shaping the future, making it easier to benefit from emerging trends.
Ready to uncover more transformative thematic investment ideas? Explore 40 cutting-edge investment themes with Zacks Thematic Investing Screens and discover your next big opportunity.
Key Cloud Computing Stocks to WatchAlphabet has been growing rapidly in the booming cloud-computing market. Over the last few years, the company has evolved from primarily being a search engine provider to a leading provider of cloud computing technology. Google Cloud is one of the key catalysts behind the company’s growth, driven by its strengthening cloud service offerings.
The solid adoption of the Google Cloud Platform and Google Workspace and continued investments in infrastructure, security, data management, analytics and AI have helped Google to expand its cloud footprint worldwide. The increasing number of cloud regions and availability zones globally has been a hallmark of Google Cloud. Currently, Google Cloud has 43 cloud regions, 130 availability zones and more than 200 network edge locations across more than 200 countries. Google Cloud is considered the third-largest cloud player among numerous cloud providers worldwide.
Google Cloud is benefiting from Alphabet’s years of investments in AI infrastructure, custom silicon and enterprise software that are beginning to translate into substantial financial returns. Alphabet’s growing GenAI capabilities and significant investments in cloud computing are potential catalysts for the future amid stiff competition in the cloud space and increasing regulatory headwinds. Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microsoft is one of the most prominent public cloud providers that delivers a wide variety of IaaS and PaaS solutions at scale. Microsoft Azure, its cloud computing platform, allows users to build, run and scale applications in the cloud. It offers a variety of services, including storage, networking, analytics and AI.
Microsoft has doubled down on the cloud computing opportunity. Azure’s increased availability in more than 60 announced regions globally has strengthened Microsoft's competitive position in the cloud computing market. Operating through a vast network of global data centers that ensure high availability and reliability for applications, Azure offers seamless access to all the services included in the portal once customers subscribe to it. Subscribers can use these services to create cloud-based resources, such as virtual machines (VMs) and databases, which can then be assembled into running environments used to host workloads and store data.
As Microsoft continues to push the boundaries of networking technology, it aims to create innovative, resilient and secure solutions that enable businesses to leverage AI and the cloud to their fullest potential. This Zacks Rank #3 company is investing heavily in AI-powered cloud services, integrating Azure OpenAI Service, Copilot and ML into various cloud solutions, making AI a central feature of Azure to empower organizations to manage their applications with greater confidence and efficiency.
Amazon enjoys a leading position in the cloud computing market, particularly in the IaaS space, thanks to Amazon Web Services (“AWS”), which is one of its high-margin businesses. The expanding customer base of AWS, driven by its strengthening cloud offerings, will continue to aid Amazon's dominance in the global cloud space.
AWS is the world’s most comprehensive and broadly adopted on-demand cloud computing platform, offering more than 200 fully featured services from data centers globally. Millions of customers, including the fastest-growing startups, largest enterprises and leading government agencies, are using AWS to lower costs, become more agile and innovate faster. It reportedly offers the widest variety of databases that are purpose-built for different types of applications to enable subscribers to choose the right tool for the job.
Amazon aims to extend AWS’ AI and ML capabilities to facilitate improved decision-making. This Zacks Rank #2 (Buy) company intends to expand its global infrastructure for faster and more reliable service with low latency and maximum availability. From cloud-native applications and AI-driven solutions to edge computing and sustainability initiatives, AWS is likely to push the limits in the realm of cloud computing technology.
Arista provides cloud networking solutions for data centers and cloud computing environments. The company utilizes the Linux-based Extensible Operating System (EOS), which supports various cloud and virtualization solutions.
In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance, along with programmability that enables integration with third-party applications for network management, automation and orchestration. Arista provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency. The company boasts a multi-domain modern software approach built upon a unique and differentiating foundation, the single EOS and CloudVision stack.
The versatility of Arista’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry. With customers increasingly deploying transformative cloud networking solutions, the company has announced several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. This Zacks Rank #1 company has introduced cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services.
A month has gone by since the last earnings report for Microsoft (MSFT - Free Report) . Shares have added about 12% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Microsoft due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Microsoft Corporation before we dive into how investors and analysts have reacted as of late.
Microsoft Q4 Earnings Beat Estimates as Cloud and AI Drive ResultsMicrosoft reported fourth-quarter fiscal 2026 earnings of $4.74 per share on a non-GAAP basis (excluding OpenAI investment impacts), which increased 23% on a year-over-year basis (up 23% in constant currency). The figure beat the Zacks Consensus Estimate by 12.59%. On a GAAP basis, earnings per share were $4.81, up 32% year over year.
Revenues of $90 billion increased 18% year over year and beat the Zacks Consensus Estimate by 2.93%. At cc, revenues grew 17% year over year, reflecting continued strength in cloud and AI demand.
Results for the quarter included several discrete items relative to the guidance Microsoft provided on April 29, 2026, which together added 27 cents to earnings per share. These included a $3.2 billion gain tied to Microsoft's investment in Anthropic and lower-than-expected costs associated with the company's first-ever Voluntary Retirement Program, partially offset by severance expense and impairment charges in the Xbox business.
Microsoft Cloud revenues totaled $59.3 billion, up 27% year over year. Commercial remaining performance obligation reached $678 billion, up 84% year over year, with sequential growth driven largely by commitments from customers other than AI model developers.
MSFT's Q4 Segment PerformanceProductivity & Business Processes
The Productivity & Business Processes segment generated $37.8 billion in revenues, which grew 14% year over year (14% in cc).
Microsoft 365 Commercial cloud revenues increased 14% on a reported basis, or 16% when adjusted for a prior-year comparable that had benefited from two points of in-period revenue recognition.
Microsoft 365 Consumer cloud revenues rose 24% (22% in cc). LinkedIn revenues increased 12% (10% in cc). Dynamics 365 revenues grew 13% (12% in cc).
Operating income for the segment rose to $21.9 billion from $19 billion a year earlier, representing an increase of about 15%.
Intelligent Cloud
The Intelligent Cloud segment contributed $39.3 billion in revenues, up 32% year over year (31% in cc).
Azure and other cloud services revenues surged 43% year over year, with growth accelerating from the prior quarter on continued demand across workloads.
Operating income for the segment increased to $16 billion from $12.1 billion a year earlier, up roughly 31%.
More Personal Computing
The More Personal Computing segment generated $12.9 billion in revenues, down 4% year over year (down 5% in cc), pressured by weaker hardware and gaming content revenues, partly offset by growth in search advertising.
Windows OEM and Devices revenues declined 7%. Xbox content and services revenues fell 10%, while Search advertising revenues, excluding traffic acquisition costs, rose 10% (9% in cc).
Operating income for the segment declined to $2.7 billion from $3.2 billion a year earlier, down about 14%, reflecting severance and impairment charges tied to the Xbox business.
MSFT's Notable Developments in Q4Microsoft continued expanding its AI and cloud infrastructure during the quarter, adding new data center capacity across multiple continents to support growing demand.
The company disclosed plans to extend the estimated useful life of its data center and office buildings to 25 years from 15 years starting in fiscal 2027, a change that will affect future depreciation and lease accounting. More future data center capacity is also expected to be structured as operating leases rather than finance leases going forward.
Microsoft 365 Copilot paid seats surpassed 30 million, with net seat additions more than doubling on a sequential basis during the quarter.
On the leadership side, Microsoft named a LinkedIn executive to lead the professional networking business going forward. The company also introduced a new, more cost-efficient AI coding model during the quarter and lowered Xbox Game Pass subscription prices.
Management indicated it is resetting decisions across Xbox content, platform and operations, with an expectation for the gaming business to return to growth in fiscal 2027.
Microsoft also highlighted continued investment in AI-driven cybersecurity capabilities, describing a multi-model, agentic approach to threat detection and response that combines smaller, efficient models for the bulk of routine tasks with larger frontier models for more complex cases.
MSFT's Financial Performance in Q4Gross margin reached $60.5 billion, up about 15% year over year.
Total operating expenses increased to $19.9 billion from $18.1 billion, up roughly 10%, driven by continued investment in research and development, AI talent and data. Research and development expenses were $10 billion, sales and marketing were $7.6 billion, and general and administrative expenses were $2.3 billion.
Operating income increased 18% year over year (18% in cc) to $40.6 billion. Net income reached $35.8 billion, up 31% on a GAAP basis; on a non-GAAP basis excluding OpenAI-related impacts, net income was $35.3 billion, up 22% (22% in cc).
Other income and expense, net, was a positive $3.4 billion in the quarter, compared with a negative $1.7 billion a year earlier, aided by net gains on investments and derivatives.
MSFT's Q4 Capital Expenditure and InfrastructureCash paid for additions to property and equipment was $35.8 billion in the quarter. Including finance leases, total capital expenditures and finance lease additions rose sharply year over year as the company continued to build out AI and cloud capacity.
Cash flow from operations totaled $55.4 billion, up about 30% year over year, driven by strong cloud billings and collections.
As of June 30, 2026, Microsoft maintained total cash, cash equivalents and short-term investments of $76.8 billion compared with $94.6 billion a year earlier. Long-term debt (including current portion) was $31.1 billion.
Microsoft returned $10.2 billion to shareholders through dividends and share repurchases during the fiscal fourth quarter.
MSFT's OpenAI Partnership UpdateThe fiscal fourth quarter reflected net gains from investments in OpenAI of $480 million, adding 7 cents to earnings per share. This compares with the fourth quarter of fiscal 2025, when net losses from OpenAI investments decreased net income and earnings per share by $1.575 billion and 21 cents, respectively.
These OpenAI-related impacts have historically created volatility in reported GAAP results, leading the company to provide non-GAAP measures excluding these effects to help investors better understand operational performance.
MSFT's Q1 2027 OutlookFor the first quarter of fiscal 2027, Microsoft expects total company revenues between $89.85 billion and $90.95 billion, suggesting growth of roughly 16% to 17%.
The Intelligent Cloud segment is expected to generate revenues between $40.95 billion and $41.25 billion. The Productivity and Business Processes segment is expected to generate revenues between $36.7 billion and $37.0 billion.
Foreign currency is expected to reduce total revenue growth by less than 1 point in the first quarter. Excluding any impact from OpenAI investments, other income and expense is expected to be roughly negative $100 million, as interest income is more than offset by interest expense, including payments tied to data center finance leases. The effective tax rate for the quarter is expected to be approximately 20%.
Capital expenditures are expected to exceed $50 billion in the first quarter of fiscal 2027, reflecting both continued infrastructure investment and the impact of the lease reclassification tied to the useful-life change for data centers and office buildings. For fiscal 2027, Microsoft expects capital expenditures of roughly $175 billion under the updated accounting treatment, while underlying investment levels for calendar 2026 remain unchanged from prior guidance.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in fresh estimates.
VGM ScoresCurrently, Microsoft has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Microsoft has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerMicrosoft is part of the Zacks Computer - Software industry. Over the past month, Pegasystems (PEGA - Free Report) , a stock from the same industry, has gained 19.5%. The company reported its results for the quarter ended June 2026 more than a month ago.
Pegasystems reported revenues of $420.72 million in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $0.35 for the same period compares with $0.28 a year ago.
For the current quarter, Pegasystems is expected to post earnings of $0.48 per share, indicating a change of +60% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Pegasystems has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
Characteristics and Risks of Standardized Options: https://bit.ly/2v9tH6D. Microsoft (MSFT) has surged following earnings, with strong Azure and cloud growth helping shares rally 48% from their June low and reach a 10-month high.
Americké akciové trhy v pátek zakončují týden v opatrnějším režimu. Po výrazném růstu technologických akcií z předchozího dne se investoři soustředili na projev předsedy Federálního rezervního systému Kevina Warsh(e) v Jackson Hole a na další vývoj americké měnové politiky.
Podle dostupných údajů index S&P 500 během pátečního obchodování oslabil přibližně o 0,3 %, Dow Jones ztratil kolem 0,1 % a technologický Nasdaq odepsal zhruba 0,5 %. Trh tak část zisků z předchozího dne odevzdal.
Hlavním impulzem pro dnešní vývoj byl projev Kevina Warshe na sympoziu v Jackson Hole. Šéf Fedu zdůraznil, že cenová stabilita zůstává klíčovou povinností centrální banky a že inflace je stále příliš vysoká. Zároveň nedal trhu jednoznačný příslib dalšího vývoje sazeb, čímž ponechal prostor pro případné zvýšení sazeb v září.
Reakce byla výraznější na dluhopisovém trhu. Výnos desetiletého amerického státního dluhopisu vzrostl přibližně z 4,67 % na 4,72 %. Trh následně zvýšil odhad pravděpodobnosti zářijového zvýšení sazeb. Vyšší výnosy jsou obecně méně příznivé pro růstové a technologické akcie, jejichž valuace jsou citlivější na cenu peněz.
Pozornost investorů zůstává také u Nvidie. Společnost ve čtvrtek zveřejnila velmi silné výsledky a výhled, což pomohlo technologickému sektoru k výraznému růstu. V pátek však Nvidia část zisku odevzdala a její akcie klesly přibližně o 4 %.
Vývoj v polovodičovém sektoru ukazuje, že investoři jsou po mimořádném růstu AI akcií stále citlivější na ocenění. Marvell Technology například oslabil přibližně o 10 % navzdory tomu, že výsledky překonaly očekávání. Trh tak začíná více řešit, zda vysoká očekávání spojená s AI dokážou ospravedlnit současné valuace.
Páteční vývoj zároveň nebyl plošným výprodejem technologií. Některé velké technologické společnosti naopak rostly. Amazon například podle dostupných údajů přidal přes 3 % a Microsoft zhruba 2 %, zatímco Nvidia a ASML oslabovaly. To naznačuje spíše rotaci uvnitř velkých technologických titulů než odchod investorů z celého sektoru.
Mezi nejvýraznější pohyby dne patřil propad PayPalu, jehož akcie ztrácely zhruba 12 % po zprávách, že potenciální kupující odstoupili od plánů na převzetí společnosti
Páteční pokles Wall Street zatím nepůsobí jako změna dlouhodobého trendu. Spíše jde o kombinaci vybírání zisků po silném růstu Nvidie, vyšších výnosů amerických dluhopisů a nejistoty ohledně dalšího kroku Fedu.
All the competitors mentioned are likely to have less cash leftover after spending massive sums on data centers.
*Stock prices used were the afternoon prices of Aug. 21, 2026. The video was published on Aug.23, 2026.
Parkev Tatevosian, CFA has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Microsoft MSFT , the enterprise-software, cloud and artificial-intelligence powerhouse, climbed approximately 1.1% to $488.93 Monday even as semiconductor stocks dragged the Nasdaq lower. That resilience is no accident. Investors see Microsoft's colossal contracted backlog as a powerful cushion if the technology trade cracks again.
Fiscal fourth-quarter revenue jumped 18% to $90 billion, Azure growth accelerated to 43% and commercial remaining performance obligations exploded 84% to $678 billion. Roughly 30% of those commitments should convert into revenue within 12 months, while Microsoft Cloud revenue advanced 27% to $59.3 billion. The demand is already booked. Now Microsoft must deliver it.
The valuation picture adds fuel to the bull case: Microsoft's $488.93 share price sits 15.51% below its $578.67 GF Value estimate. But the AI buildout carries a brutal price tag. Quarterly capital expenditures topped $41 billion, driving free cash flow down 23% to $19.6 billion. Investors still believe Microsoft can transform aggressive infrastructure spending into durable cash generation, but the widening gap between operating cash flow and free cash flow is the pressure point that cannot be ignored.
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Microsoft CEO Satya Nadella. George Chan/Getty Images Microsoft employees aren't just comparing salaries this year, they're comparing how much AI they use.
An internal spreadsheet viewed by Business Insider shows hundreds of employees voluntarily reporting not only their raises, bonuses, and stock awards, but also the dollar value of the AI tools they used over the past month. Microsoft is offering employees an internal tool to track their AI usage and spending.
The figures offer a rare glimpse into how AI is being used inside Microsoft as the company races rivals, including Meta, Google, OpenAI, and Anthropic, to build AI products.
As the company spends hundreds of billions of dollars on AI infrastructure and pushes employees to weave AI into their daily work, the spreadsheet shows how usage varies dramatically across teams, from just a few dollars a month to tens of thousands. It also suggests that, at least for now, heavier AI use isn't translating into bigger raises, bonuses, or promotions.
Microsoft isn't alone in trying to understand how employees use AI. Across Big Tech, companies are increasingly tracking AI consumption as they spend billions building models and infrastructure.
What are the real-life consequences of AI?
New to this year's spreadsheet was a column asking employees to self-report their "AI $ Usage Per Month" using the internal tool, which shows the dollar amount of their AI usage over the last 28 days. A Microsoft spokesperson said the AI usage tracking tool is still in early testing.
The document had nearly 600 entries from US employees when Business Insider analyzed the data, showing how much the employees say they received this year in base pay, raises, cash bonuses, and stock awards. About 350 of them had reported their AI usage at the time.
Of those reported, the median AI usage amount was about $300 over 28 days. The highest reported figure was $28,000 from an employee in the Microsoft Customer and Partner Solutions organization.
Business Insider's analysis excluded levels and teams with few entries. The data is self-reported and may contain errors.
Self-reported AI usage among Microsoft employeesOrgNo. of entriesMedian AI usage, last 28 daysRangeAzure33$241$1 to $7,500Cloud + AI107$325$1 to $15,000CoreAI14$975$40 to $16,000Experiences and Devices69$250$1 to $3,391Microsoft AI15$490$45 to $10,000Microsoft Customer and Partner Solutions25$134$1 to $28,000Security12$526$58 to $10,000Microsoft employees typically share this information voluntarily and anonymously to promote pay transparency, but that means the data isn't official or comprehensive. The company had 223,000 employees on June 30, so a spreadsheet with only around 350 figures on AI usage provides a very small snapshot.
Business Insider found no meaningful correlation in the spreadsheet between reported AI usage and rewards. Higher AI usage did not appear to be associated with higher bonus ratings, merit increases, or a greater likelihood of promotion.
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Microsoft Artificial Intelligence Enterprise Software More Cloud Computing Exclusive
Microsoft CEO Satya Nadella. Sven Hoppe/picture alliance via Getty Images Microsoft employees are once again comparing notes on pay, and this year's numbers offer a rare look inside how the tech giant is rewarding its workforce in the age of AI.
An internal spreadsheet viewed by Business Insider, with nearly 600 employee submissions, details base salaries, raises, cash bonuses, and stock awards across the company as workers learn what they'll earn for the year.
The employee-reported data show how Microsoft is rewarding talent across its sprawling organization at a time when retaining its most skilled people, especially in AI and cloud, is a key strategic priority.
The data also provides an unusual snapshot of Microsoft's compensation strategy at a pivotal moment for the company. As the company pours billions into AI infrastructure, it is also competing with Meta, Google, OpenAI, Anthropic, and a growing crop of well-funded startups for the engineers and researchers who can determine whether those investments pay off.
Compensation, particularly stock awards that can dwarf annual raises and bonuses, is one of the clearest tools Microsoft has for recruiting and retaining those workers.
Internal Tesla database shows why workers might accept lower salaries
Microsoft declined to comment.
Microsoft employees typically share this information voluntarily and anonymously to promote pay transparency, but that means the data isn't official or comprehensive. The company had 223,000 employees on June 30, so a spreadsheet with nearly 600 submissions provides a very small snapshot. The company also recently cut thousands of employees in a fresh round of layoffs in July.
Employees with higher pay or seniority may contribute less to such spreadsheets, so the pay ranges may skew lower than might be representative of the total workforce. Business Insider removed entries that seemed anomalous.
Microsoft's companywide compensation ranges by levelLevelBase payRaise %Cash bonusStock award59$111K to $134K0% to 2.4%$0 to $17.9K$0 to $10K60$115K to $155.5K0.8% to 2.5%$10K to $25K$10K to $25K61$113K to $177K0.6% to 2.5%$7.9K to $30K$0 to $36K62$100.2K to $192.8K0.5% to 2.5%$7K to $78K$0 to $135K63$136.4K to $218K0% to 2.9%$0 to $43.9K$0 to $64K64$140K to $245K0% to 5%$0 to $60K$0 to $80K65$169K to $263.9K0% to 3%$2K to $99.6K$0 to $130K66$200K to $272K0.5% to 3.5%$27K to $69K$90K to $200K67$239.1K to $280K0.5% to 1%$45.3K to $110K$140K to $300KBusiness Insider's analysis excluded levels and teams with few entries, as well as submissions with unusually small or large entries that may be typos, since the data is self-reported and may contain errors.
The spreadsheet also included pay by organization, showing how much employees report making by team.
Microsoft compensation ranges by organizationOrgBase payRaise %Cash bonusStock awardAzure$123K to $252K0.5% to 2.5%$7.9K to $105K$9K to $294KCloud + AI$111K to $450K0% to 5%$0 to $300K$9K to $1.4MExperiences and Devices$115K to $253.1K.05% to 3%$0 to $105K$0 to $294KMicrosoft AI$134K to $232K0.5% to 2.5%$10.4K to $78K$10K to $140KMicrosoft Customer and Partner Solutions$129K to $242K0% to 1.4%$2K to $79.2K$0 to $91KSecurity$122K to $232K0% to 2.5%$0 to $60K$0 to $91KXbox$134K to $218K0.5% to 1.2%$15.6K to $42K$12K to $65KBusiness Insider last year reported Microsoft's internal pay guidelines, revealing how much the company generally offered new hires in engineering and research roles in the US.
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Microsoft Artificial Intelligence Enterprise Software More Cloud Computing Exclusive
These days, I see Microsoft (MSFT +1.02%) less as an old software giant and more as a core AI utility for the global economy, and that shift changes how I think about the stock. With Azure, the company's cloud platform, growing north of 40% and AI revenue already running at a $37 billion annual pace, I believe Microsoft still has what it needs to beat the market into 2027 and beyond.
Image source: Getty Images.
I start with the numbers only to understand the scale. In fiscal 2026 (ending June 30), Microsoft reported $331.8 billion in revenue, up 18%, and operating income of $155.2 billion, up 21%. Azure revenue surpassed $100 billion for the year, and in the most recent quarter, Azure and other cloud services jumped 43%, topping expectations. Those results tell me AI demand is showing up in actual sales and profits.
Today's Change
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Microsoft is now an AI stock The figure that changed how I think about Microsoft is the AI run rate. Management disclosed in its third-quarter call that the AI business has reached a $37 billion annual revenue run rate, up 123% from a year earlier. That includes revenue from Azure AI services, Microsoft 365 Copilot, GitHub Copilot, and other first-party AI tools. A year ago, many investors were asking if AI would ever show up as real money. Now there is a concrete number that sits next to Azure and Office.
I view Copilot as a key piece of the puzzle. Early this year, Microsoft had more than 450 million commercial Microsoft 365 seats. At the start of 2026, only a small slice of those users paid for Copilot. Since then, paid Microsoft 365 Copilot seats have passed 30 million and are rising every quarter, with large enterprises rolling it out to most information workers. Every percentage point of conversion adds billions in high-margin subscription revenue on top of existing licenses. For me, that is what a durable AI business looks like. It sits within tools people use daily and increases average revenue per user, rather than relying on one-off projects.
The company still spends lots of money Of course, none of this comes free. Microsoft is tracking toward roughly $120 billion or more in AI-related capital expenditure in fiscal 2026 and an adjusted calendar 2026 capex plan around $175 billion, with about $25 billion tied to higher component prices for graphics processing units and memory.
That level of spending would scare me if I did not see evidence that the infrastructure is turning into cash. Gross margin dollars and operating income grew faster than revenue, even with heavy AI investment, which suggests Microsoft is finding ways to spread costs across many services and keep margins healthy.
I also pay attention to how experts perceive the stock. Right now, Microsoft carries dozens of "Buy" ratings from analysts who cover the stock and virtually no "Sell" ratings, with the median price target from analysts surveyed by Yahoo! Finance of $569, representing potential upside of 17% from current levels.
That is not a guarantee of future returns, but it reflects a shared view that Microsoft's AI business is becoming a growth engine. In simple terms, this is no longer just a "safe" defensive tech name. It is treated as a leader in the AI infrastructure race alongside Nvidia.
So, is Microsoft a good buy? For me, the answer is yes, with a clear condition. You have to believe the company will stay at the center of enterprise AI, not just chase the trend. When I look at Azure's growth, the Copilot seat counts, the $37 billion AI run rate, and the scale of data center investment, I see a company that has already crossed that line.
