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Amazon (AMZN +1.54%) and Microsoft (MSFT +2.68%) are two of the largest cloud computing providers. But which one of these hyperscalers makes for the better buy? I think there's one key metric that separates the two firms, and once you recognize it, it will be hard to consider investing in the other.

Image source: Getty Images.

The growth rates look similar, but are they? In terms of market share, Amazon Web Services (AWS) is the largest cloud computing provider in the world, with Microsoft Azure coming in second. That makes both firms very important, but of the two, it's pretty clear Amazon is growing at a faster pace.

At first glance, that analysis seems wrong. In their latest quarters, Azure grew by 43%, while AWS grew by 37%. But that's not what I'm talking about.

I'm looking more at the trend lines, and it's clear that AWS' growth is accelerating rapidly. During Q1, AWS's growth rate was 28%. In Q4 2025, its growth rate was 24%. Rewinding to Q3 2025, its growth rate was 20%. That's some rapid acceleration over the past year, and considering Amazon is still pouring hundreds of billions of dollars into expanding its cloud computing capacity, I won't be surprised to see AWS' growth rate continue to accelerate over the next few quarters.

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Microsoft Azure's growth rate has remained fairly constant, despite being rapid. While it grew Azure revenue by 43% during the company's fiscal 2026 Q4 (which ended June 30), its fiscal Q3 growth rate was 40%. In fiscal Q2 and fiscal Q1, it was 39% and 40%, respectively. That's not much growth acceleration, especially considering how much money Microsoft has been laying out on capital expenditures for this division.

So, even though Amazon is technically growing more slowly than Microsoft, I still think its cloud computing business is more attractive because its revenue growth rate is rapidly accelerating. I expect this trend will continue, knowing there's even more growth ahead coming from the infrastructure investments it's making.

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I think this key point makes Amazon a better investment than Microsoft, but there's still one more factor to consider.

AWS' operating margin is comparatively impressive Unfortunately for investors, Microsoft doesn't break out individual segments' operating margins in its public reports, just revenue growth. However, based on other cloud computing firms' operating margins, Azure's is likely slightly less than Microsoft's as a whole.

MSFT Operating Margin (Quarterly) data by YCharts.

During Q2, AWS' operating margin was 39%. So, if Azure grows faster than any other part of Microsoft's business, it will be a drag on Microsoft's results and cause profits to grow slower than revenue.

The opposite is true for Amazon.

Amazon's other core business, e-commerce, has notoriously low operating margins.

AMZN Operating Margin (Quarterly) data by YCharts.

As AWS grows faster than Amazon's other businesses, Amazon's profits will grow faster than companywide revenue. So, with AWS's growth rate accelerating, companywide profits are also expected to increase rapidly. This is a great setup for the stock to deliver incredible returns over the next few years, and makes Amazon by far the better stock to buy over Microsoft.

The key factor is that AWS' growth boosts Amazon's profits, while Azure is a relative drag on Microsoft's. With each company investing hundreds of billions of dollars into new computing capacity, it makes sense for investors to back the stock that will see greater profit growth rather than the one that will see shrinking profits for each dollar brought in.

3.9.2026 22:07

Wall Street má za sebou solidní růst tažený výrokem člena FEDu Wallera, který naznačil ochotu hlasovat pro podržení sazeb na současné úrovni. Růst indexů jde na vrub především největším společnostem jako Nvidia, Meta nebo Microsoft. Index S&P 500 je půl procenta od historického maxima.

Index Dow Jones +1,18 % na 53686,11 b.
S&P 500 +1,06 % na 7747,71 b.
Nasdaq Composite +1,4 % na 26584,06 b.

Index S&P 500 +1,06 % na 7747,71 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Zbytná spotřeba +1,6 % Energie -0,7 % Finanční sektor +1,6 % Základní materiály -0,5 % Komunikační služby +1,5 % Nezbytná spotřeba 0 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Robinhood Markets (HOOD) +17 % Ciena Corp (CIEN) -10 % Coinbase Global (COIN) +10 % Tyson Foods (TSN) -7,3 % Palantir Technologies (PLTR) +7,7 % Charter Communications (CHTR) -4,8 % ServiceNow (NOW) +6,5 % Albemarle Corp (ALB) -4,1 % Principal Financial Group (PFG) +6,5 % General Mills (GIS) -3,3 %
Martin Varecha
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. 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.

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Microsoft just pulled Azure out from behind years of bundled reporting, and what the numbers reveal about its real competition changes the entire investment thesis for MSFT shareholders.

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Microsoft (NASDAQ:MSFT | MSFT Price Prediction) just voluntarily pulled Azure out from behind the curtain. The company said it will begin disclosing standalone Azure quarterly revenue as it consolidates its business units, according to reporting on September 2.

When a company reveals a number it has kept inside a larger bucket for years, that itself is information. The newly framed disclosure shows Azure sitting much closer to Google Cloud than to Amazon Web Services, and the gap to AWS is nearly three times the size of Azure’s lead over Google. For Microsoft (NASDAQ:MSFT) investors, that reframes which competitor actually matters.

What Microsoft Chose to Show, and Why Now Microsoft reorganized reporting into two segments and moved some GitHub sales from Azure into the Microsoft 365 Cloud line. That makes any growth rate straddling the change harder to trust, so read the near-term Azure prints with care.

The overall quarterly outlook was left unchanged, which matters, because a reporting reshuffle moves revenue between lines without changing the underlying business. Azure crossed $100 billion in full-year revenue for the first time, with Q4 growth of 43% year-over-year and commercial RPO of $678 billion, up 84%.

Why the Distance to AWS Dwarfs the Lead Over Google Amazon (NASDAQ:AMZN) reported $42.23 billion in AWS revenue, with 36.7% year-over-year growth, its fastest in 18 quarters. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) posted Google Cloud revenue of $24.77 billion, accelerating to 82%.

Azure sits between them, but Google’s growth rate is the more visible headline, while enterprise workloads land where identity, data, and existing contracts already sit. On that measure, Amazon is both the larger incumbent and, now, the newly available alternative for Microsoft’s most important AI partner. AWS operating margin was 39.4%, and AI and Chips each exceeded $25 billion annualized run rates.

OpenAI’s Optionality Problem OpenAI is no longer confined to Azure. It committed roughly 2 GW of Trainium capacity through AWS starting in 2027, and Anthropic separately secured up to 5 GW of Trainium chips.

That converts a captive workload into a contested one and removes a structural reason for AI compute to default to Azure. Microsoft’s Q4 EPS beat included a $3.2 billion gain from its Anthropic investment, and Amazon booked a much larger one-time gain tied to the same relationship, a reminder that these AI bets overlap even as compute flows elsewhere.

Where Microsoft’s Real Advantage Sits Microsoft’s structural edge is enterprise distribution. Microsoft 365 Copilot surpassed 30 million paid seats, and nearly 90% of the Fortune 500 ground agents use Foundry, Fabric, and Work IQ.

The company that already sells the productivity suite, the identity layer, and the developer tools has an easier path to the cloud budget than one that sells infrastructure alone. FY27 capital expenditures are planned at roughly $175 billion, a claim on future free cash flow that only pays off if that distribution converts (we profiled seven companies powering the buildout behind numbers like that, from power to cooling, in a free AI infrastructure report).

Is Microsoft Stock a Buy? Microsoft trades at a P/E of 28x with shares at $496.82, up 3.38% year-to-date. Amazon sits at a 20x P/E, Alphabet at 17x. Alphabet is the value story, Amazon the scale-plus-growth story, Microsoft the distribution story. The setup favors the distribution thesis. The Azure disclosure clarified where the real fight sits, and Microsoft’s installed base still gives it more paths to monetize AI than a growth-rate comparison to Google Cloud suggests.

Contact [email protected] for any questions or corrections.

Emise dluhopisů souvisejících s AI a technologiemi jsou pro úvěrové investory stále obtížnější ignorovat, a to vzhledem k objemu nové nabídky v poslední době a epizodám zvýšené volatility. To, co bylo zpočátku z velké části jen o americkém segmentu investičního stupně, se nyní rozšiřuje napříč regiony i napříč spektrem úvěrů různé kvality. Společnost Fidelity International se zabývá rozhodováním, které vzniká u strategií zaměřené na výnos bez omezení nějakým benchmarkem, a vysvětluje, proč v současnosti udržuje v tomto sektoru pouze omezenou expozici.

Argumenty ve prospěch dluhopisů souvisejících s AI

„Již dlouho jsme zastánci konceptu „bezpečného výnosu“ (safe yield) u investic s pevným výnosem. Zatímco otazníky ohledně rozvah vyspělých ekonomik a fiskální disciplíny přetrvávají, není pochyb o tom, že některé z největších a nejkvalitnějších úvěrových titulů na světě trpí tím, že musí své dluhopisy oceňovat s přirážkou vůči „bezrizikové“ sazbě, přestože mají výrazně lepší rozvahu než státy, vůči jejichž výnosům se oceňují. V tomto kontextu je získání přibližně 50–100 bazických bodů nad americké státní dluhopisy nebo německé státní dluhopisy například u nezadlužených emitentů s ratingem AA nebo A teoreticky atraktivní příležitostí pro investory zaměřené na celkový výnos.

Velký význam také přikládáme ukazateli „dluh v poměru k EV“ jako užitečnému indikátoru celkového úvěrového rizika. Tento ukazatel může často poskytnout mnohem více informací než tradičnější ukazatele, jako je dluh k EBITDA nebo volný Cash Flow ke dluhu. Dluh v poměru k EV jednoznačně ukazuje, jakou hodnotu trh přisuzuje cenným papírům, které jsou (alespoň teoreticky!) podřízené pohledávkám věřitelů vůči aktivům a peněžním tokům společnosti. Bez ohledu na to, kolik prostředků hyperskalární společnosti v příštích několika letech vloží do AI, jejich hodnota vlastního kapitálu ve výši pravděpodobně 13 bilionů dolarů znamená, že věřitelé se nemusí obávat znehodnocení svých pohledávek.

Dnešní valuace jsou atraktivní. Není pochyb o tom, že technologický sektor se z různých hledisek jeví jako „levný“, ať už jde o relativní ocenění sektoru, spread na jednotku zadlužení nebo spready upravené podle ratingu,“ hodnotí situaci James Durance.

Co nás drží zpátky?

Rychlost a rozsah rozvoje AI jsou tak obrovské, že převyšují jakékoli historické srovnání, které by za něco stálo. Kapitálové výdaje na datová centra, které v roce 2027 dosáhnou více než 3 % amerického HDP a během pouhých dvou let přidají 1,7procentního bodu k HDP, představují nejrychlejší investiční boom v historii (jak uvádí Apollo). To znamená, že financování tohoto rozvoje je také v rozsahu, který dosud nebyl otestován. Jelikož jde o tak významný příspěvek k růstu HDP, případné zpomalení nebo obrat tohoto trendu by mohl být významným negativním faktorem pro ekonomiku jako celek.

Výnos z AI – jak pro společnosti realizující kapitálové výdaje, tak pro zákazníky investující do této technologie – zůstává obtížně vyčíslitelný. Cirkulární financování pomáhá rozvoji pokračovat, avšak ziskové marže v ekonomice mimo technologický sektor, stejně jako marže samotných tvůrců této infrastruktury, zatím nezažily takový skok, jaký bychom potřebovali vidět, aby ospravedlnil obrovské množství investovaného kapitálu.

Historie není nakloněna nadvýkonnosti sektorů s rychlým růstem zadlužení. Sektory s nejrychlejším růstem dluhu obvykle v klíčových časových obdobích zaostávaly za trhem, často s dramaticky negativními důsledky – zejména technologie/ telekomunikace, média a technologie v roce 2001, finanční sektor a nemovitosti v roce 2007 a břidlice a energetika v roce 2014.

Zdá se, že úvěrový trh zatím zvolil kategorizovat většinu rizika v tomto prostoru spíše jako riziko související s nabídkou než jako riziko vyplývající z úvěrových fundamentů. Vyšší než očekávaná nabídka byla nepochybně hlavním faktorem nedávného zhoršení výkonnosti dluhopisů. Oznámení Googlu, že letos již nebude emitovat další dluh v dolarech, a jakékoli další známky toho, že by tempo emisí mohlo zpomalovat, by proto měly být významným pozitivním faktorem pro trh, který se letos potýká s nadměrným objemem technologických emisí.

Co to znamená pro nastavení pozic?

Jako investoři, kteří nejsou vázáni benchmarkem, můžeme na situaci nahlížet trochu jinak než manažeři, kteří se vůči benchmarku poměřují. Benchmarkoví investoři se musí zaměřovat na velikost jednotlivých sektorů ve svých indexech (viz obrázek 1 níže) a na související tracking error, aby měli co nejlepší šanci generovat alfa. Neomezený investor se naopak může věnovat tomu, zda si sektor jako celek a každý jednotlivý titul skutečně zaslouží jeho pozornost.

Zadruhé, na jiných částech globálního úvěrového trhu můžeme najít srovnatelné nebo dokonce vyšší výnosy než v technologickém sektoru, aniž by s sebou nesly stejné rizikové faktory. To může znamenat podstoupení rizik v jiných oblastech, jako je nižší úvěrová kvalita (BB), riziko podřízenosti (evropské finanční společnosti a podnikové hybridní dluhopisy), strukturální riziko (CLO) nebo cyklické riziko (například nemovitosti nebo automobilový sektor).

Zatřetí, tradičně jsme se zaměřovali na větší emitenty s dlouhou historií na kapitálových trzích a na známé společnosti, protože se domníváme, že to obecně vede k nižšímu riziku finančních potíží a selhání v průběhu času. Přestože je rozvoj AI skutečný a jeho potenciální ekonomické dopady jsou skutečně zásadní, domníváme se, že tato revoluce bude mít své vítěze i poražené. Za jinak stejných podmínek by to mohlo znamenat vyšší míru defaultů – zejména u některých novějších, menších a spekulativnějších struktur, které přicházejí na trh,“ vysvětluje James Durance.

Technologie a hyperskalární společnosti by mohly dosáhnout až 11 % amerického indexu podnikových dluhopisů investičního stupně

Zdroj: Fidelity International, Deutsche Bank, Bloomberg, ICE Indices. Mezi hyperscalery jsou zahrnuty společnosti MSFT, AMZN, META, GOOGL, ORCL, NVDA, SPCX.

Microsoft and Meta just locked in nuclear power for decades, and the contracts are reshaping how the entire supply chain gets valued. Three very different companies sit between those deals and your portfolio, and treating them as one trade could…

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The nuclear reactor services and large-scale generation segment is being repriced in real time as hyperscalers compete for firm, carbon-free baseload. Microsoft’s previously disclosed Three Mile Island/Crane restart agreement with Constellation and Meta’s 20-year Clinton nuclear power purchase agreement with Constellation set the template: multi-decade contracts, investment-grade counterparties, and physical delivery from existing U.S. reactors.

Constellation itself just quantified the momentum, signing approximately 920 megawatts of long-term nuclear contracts with an average duration of 18 and a half years during the second quarter alone, though management declined to identify the customers.

Three U.S.-listed names sit at very different points of this supply chain, and they should not be traded as one basket.

Constellation Energy: The Fleet Signing the Contracts Constellation Energy (NASDAQ:CEG | CEG Price Prediction) is the largest US nuclear operator and the direct counterparty on the disclosed Microsoft Crane restart and Meta Clinton PPA. This is a merchant IPP with real, PPA-backed cash flows. The company carries a market cap of roughly $99 billion and trades at a forward P/E of 23, with shares around $290.04 after a 20.81% year-to-date (YTD) decline.

The second-quarter data point that matters: The fleet produced 40 terawatt hours at a 93% capacity factor, and during the mid-Atlantic heat wave management hit a nuclear capacity factor above 99%. Adjusted operating EPS was $2.55, and full-year guidance was raised to $11.50 to $12.50 per share. The Crane Clean Energy Center restart cleared another gate when the NRC approved the Crane New Fuel Licensing Amendment request.

Bull case: CEG is the only US operator with a fleet of scale to sign multi-decade hyperscaler PPAs, roughly 30% of clean base load output is now under long-term contract, and PJM capacity pricing is tightening. CEO Joe Dominguez framed the market bluntly: “We have a peak capacity concern, not an energy concern.”

Risk: The Illinois ZEC program ends in May 2027, PJM and FERC rules for co-located large loads remain unsettled, and commodity hedges create earnings volatility. Management expects further PJM clarity around the November timeframe and a FERC order in the first to second quarter of next year.

BWX Technologies: The Sole-Source Reactor Component Play BWX Technologies (NYSE:BWXT) is the sole US supplier of naval nuclear reactors and is aggressively building out domestic commercial nuclear component manufacturing. It is an established defense contractor with real earnings. Shares closed at $155.67, and the stock is down 14.40% YTD.

Q2 2026 revenue reached $902 million, up 18% year over year, with adjusted EPS of $1.07. Backlog ended the quarter at $8.4 billion, up 40% year over year, on a trailing 12-month book-to-bill of 1.7 times. Commercial operations organic revenue grew 33%. The July 1 close of Precision Components Group establishes BWXT as a US commercial nuclear component manufacturer, and the company received a $21 million DOE award to support domestic capacity expansion.

Bull case: CEO Rex Geveden said the industry is in “the early stages of a multi-decade super cycle of growth” and that there is “a credible opportunity to secure at least one new build nuclear equipment order before the year end.” The pipeline includes AP1000s, BWRX-300 reactors, TerraPower, and Rolls-Royce, plus government-backed programs tied to a $17.5 billion DOE Energy Dominance Financing Office loan commitment.

Risk: Federal budget uncertainty, qualified-tradesperson shortages, and heavy near-term capex, with capital expenditures potentially approaching 7% of sales in future years.

GE Vernova: The Turbine and Grid OEM With Optional SMR Exposure GE Vernova (NYSE:GEV) is the equipment supplier arming the buildout: gas turbines, transformers, switchgear, and the Hitachi BWRX-300 SMR. This is an established industrial with real earnings, but a very different cash flow profile than a regulated utility. Shares are at $921.94, up nearly 36% YTD, though the stock has cooled 8.43% over the past month amid headlines around competitive threats, including a Barron’s piece asking whether SpaceX is coming for GE Vernova.

The quarter that matters: total backlog reached $176 billion, up $13 billion from last quarter, and management said it is “on track to reach $200 billion in 2027.” Q2 bookings hit $24.2 billion, an 88% increase year-over-year. Gas power gigawatts under contract rose from 100 to 116 gigawatts sequentially, with a target of at least 125 gigawatts under contract by the end of the year. Electrification equipment backlog is $41 billion, up 69%, and data-center electrification orders exceeded $5 billion in the first half of 2026. On the nuclear side, GEV secured two more tech selects and early work agreements for SMR in the US during the quarter.

Bull case: Backlog visibility through the end of the decade, gas turbine output scaling to 20 gigawatts annualized beginning in the third quarter and a path to 30 gigawatts of annual output in 30, and Q2 free cash flow of $5.1 billion. Full-year 2026 free-cash-flow guidance was raised to $11.5 to $12.5 billion.

Risk: The Wind segment is guided to roughly $400 million of EBITDA losses in 2026, and tariff and supply chain risk remain.

Bottom Line for Investors These three names sit at different rungs of the nuclear power ladder. Constellation owns the reactors and signs the PPAs, BWXT builds the components and dominates naval nuclear, and GE Vernova sells the turbines and grid gear that make the rest of the buildout physically possible. Cash flow profiles differ: PPA-backed generation, government-anchored manufacturing, and backlog-driven equipment. Investors comparing them as a single trade will misprice all three. For readers looking further down the supply chain, from utilities to fuel, we mapped five more ways to play the restart in a free nuclear renaissance report.

Contact [email protected] for any questions or corrections.

With a September 1 stock sale, CEO Satya Nadella joined the rather small club of 2026 Microsoft (NASDAQ: MSFT) insider traders and simultaneously became responsible for more than half the value raised by senior personnel via the market.

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This signal is triggered upon the reporting of the trade to the Securities and Exchange Commission (SEC).

Specifically, a September 2 Securities and Exchange Commission (SEC) filing revealed that Nadella dumped 86,525 MSFT shares at an average price of $501.46, thus making a total of nearly $43.4 million.

Notably, the other seven Microsoft stock insider sales of the year raised a total of $22.8 million, meaning that the CEO’s only 2026 trade accounted for 65.66% of the total value.

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This signal is triggered upon the reporting of the trade to the Securities and Exchange Commission (SEC).

Big tech recorded more than $500 million in insider sales in 30 days Meanwhile, CEO Satya Nadella’s trade came at the tail end of what has proven to be a busy period for big tech insiders. 

Indeed, just one day before the Microsoft share sale, Nvidia (NASDAQ: NVDA) recorded its biggest single equity dump of the decade when Director Mark Stevens raised more than $400 million.

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This signal is triggered upon the reporting of the trade to the Securities and Exchange Commission (SEC).

Furthermore, along with a large variety of smaller sales, the sector-wide activity was inaugurated by one of the richest men on the planet, Jeff Bezos, who first disclosed his intent to sell up to $4 billion worth of Amazon (NASDAQ: AMZN) stock and then sold well over $300 million.

Still, despite the timing and the scale of the insider sales being curious, it is unlikely to be a signal of large behind-the-scenes moves, considering the strict rules surrounding such market maneuvers.

Investors might, however, find the activity interesting as it came as, on the one hand, the grassroots backlash against artificial intelligence (AI) and the industry is growing and, on the other hand, companies are reporting a series of impressive quarterly results, albeit backed by unprecedented capital expenditures (CapEx).

Microsoft stock price performance Elsewhere, the Microsoft trade came shortly after MSFT shares found their August peak after the strong rally started in late July. The equity is up 1.88% in the last month and more than 27% if the view is extended to include the latest earnings rally and is changing hands at $496.82.

Microsoft stock price YTD chart. Source: Google Zooming out, however, Microsoft stock has overall underperformed the wider market since 2026. Year-to-date (YTD), MSFT is 5.05% in the green while the benchmark S&P 500 index rose 11.78%.

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Microsoft (MSFT.O) on Wednesday reported sales from its Azure cloud computing unit on a quarterly basis for the first time, providing a direct comparison to its top rivals Amazon.com (AMZN.O) and Alphabet's (GOOGL.O) Google as the three compete in the computing market amid an ​AI data center boom.

Microsoft said that Azure had $29.4 billion in sales in its most recently ​ended quarter and $101.9 billion in sales in its most recent fiscal year ended June ⁠30. The figures place Microsoft behind Amazon, whose cloud sales were $42.2 billion in its most recent quarter, ​but ahead of Google, which reported $24.8 billion in cloud sales in its most recent quarter.

Microsoft previously reported a ​closely watched growth rate for Azure but not its sales. Microsoft will move from three reporting segments to two: one called "Agents and Infra" that will include its cloud computing services, its sales from AI-based software and its revenue from more ​traditional business software, and one called "Devices and Consumer" that will include its Windows operating system, its Xbox ​gaming unit and its advertising sales across both its Bing search engine and LinkedIn, the business-focused social network.

"There's no question ‌AI represents ⁠a profound shift in both technology and business," Microsoft CEO Satya Nadella said in a statement accompanying the change. "It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models."

Microsoft also updated the quarterly forecast it gave investors last month, slightly ​lowering it its Azure ​revenue forecast, but said ⁠the changes reflected the move of some sales from GitHub, its code-hosting service, which were previously grouped with Azure, to grouping those with its M365 Cloud software ​businesses, which includes most of its advanced AI offerings. Microsoft's overall current ​quarter outlook remains ⁠unchanged, the company said.

Microsoft is a major cloud computing provider to OpenAI, which exclusively used Microsoft for training its models until changes in the terms of its deal allowed it to work with Amazon Web Services and ⁠others.

AWS ​had $128.7 billion in sales for calendar 2025, and Microsoft Azure had ​sales of $85.8 billion over the comparable four-quarter period. Google has not reported full-year cloud sales.

Microsoft shares rose about 1.4% in after-hours trading ​on Wednesday after the company disclosed the change.

The Trump administration is supporting OpenAI in ⁠a lawsuit against the New York Times, arguing in favor of the use of copyrighted writing to train artificial intelligence.

The Times accuses OpenAI and its largest financial backer, Microsoft, of using millions of newspaper articles without permission to train OpenAI’s popular chatbot. Other newspapers have joined in the suit, first filed in 2023.

In a brief filed in Manhattan federal court on Tuesday, the US government weighed in for the first time on lawsuits over the tense battle over AI and copyright. A brief has advisory rather than legal weight but could bolster tech ⁠companies as they fight the claims.

“The United States has a strong interest in continuing to develop a robust and competitive artificial intelligence industry that sets the standard for the practice and procedure of AI use globally … As such, it is critical for the United States to ‘retain global leadership in artificial intelligence’,” the brief said.

Copyright owners, including authors, publishers, music labels and news outlets, have filed dozens of lawsuits over AI training against tech companies such as OpenAI, Anthropic and Meta Platforms. They say the companies ⁠misuse their material to train AI systems and do so without compensation.

For AI chatbots to generate responses, machine learning systems are first fed billions of lines of text. The bots produce their output by statistical analysis of what the next word should be by matching a user’s query to parts of the database.

Spokespeople for the Times and OpenAI did not immediately respond ‌to requests for comment on the filing on Wednesday.

“AI dominance is critical to promote national security, prosperity, and economic mobility for all Americans,” US associate attorney general Stanley Woodward Jr said in a statement posted to X. “This Administration will never let our Nation be at a disadvantage relative to our foreign adversaries based on a plainly incorrect understanding of copyright law.”

The US commerce secretary, Howard Lutnick, separately told G20 officials ‌at a meeting in North Carolina on Wednesday that their countries should embrace fair use and allow AI companies to train their models on creators’ work while finding ​a way to “protect artists”.

All of the pending cases will probably ​revolve around whether AI systems make ​fair use of copyrighted material by ​using it to create new, transformative content. The first two judges to consider the ​question issued diverging rulings ‌last year.

The government ​agreed with ​tech companies in Tuesday’s brief that AI training is “extraordinarily” transformative.

“Beyond the subject matter of this litigation, LLMs are already helping researchers across fields achieve major breakthroughs,” the brief said. “Constraining LLM development under a misunderstanding of fair use doctrine would thwart such creative and scientific progress while hindering American prosperity and economic mobility.”

Cox Capital Mgt LLC boosted its stake in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 13.4% during the second quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The fund owned 22,610 shares of the software giant’s stock after acquiring an additional 2,669 shares during the quarter. Microsoft makes up approximately 4.7% of Cox Capital Mgt LLC’s holdings, making the stock its 3rd biggest holding. Cox Capital Mgt LLC’s holdings in Microsoft were worth $8,434,000 as of its most recent SEC filing.

Several other hedge funds and other institutional investors have also recently added to or reduced their stakes in MSFT. WFA Asset Management Corp raised its position in shares of Microsoft by 27.0% during the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant’s stock worth $427,000 after acquiring an additional 216 shares during the last quarter. Ironwood Wealth Management LLC. boosted its holdings in Microsoft by 0.3% in the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant’s stock valued at $5,658,000 after acquiring an additional 38 shares during the last quarter. Discipline Wealth Solutions LLC boosted its holdings in Microsoft by 410.4% in the third quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant’s stock valued at $1,144,000 after acquiring an additional 2,138 shares during the last quarter. Wealth Group Ltd. increased its position in Microsoft by 1.2% in the fourth quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant’s stock worth $1,000,000 after purchasing an additional 28 shares during the period. Finally, Eagle Capital Management LLC raised its holdings in Microsoft by 0.4% during the 4th quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant’s stock worth $9,735,000 after purchasing an additional 96 shares during the last quarter. Institutional investors and hedge funds own 71.13% of the company’s stock.

Wall Street Analyst Weigh In MSFT has been the topic of several 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. Wedbush reissued an “outperform” rating and set a $575.00 price target on shares of Microsoft in a research note on Wednesday, May 13th. Truist Financial reaffirmed a “buy” rating and issued a $575.00 price objective on shares of Microsoft in a research note on Wednesday, July 22nd. The Goldman Sachs Group reaffirmed a “buy” rating and set a $640.00 target price on shares of Microsoft in a report on Thursday, July 30th. Finally, Royal Bank Of Canada reiterated an “outperform” rating and set a $640.00 target price on shares of Microsoft in a research report on Thursday, July 30th. Forty-two equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $562.49.

Check Out Our Latest Research Report on MSFT Insider Transactions at Microsoft In other news, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction dated 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 in the company, valued at $21,188,276.96. The trade was a 10.13% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CEO Judson Althoff sold 10,000 shares of the business’s stock in a transaction that occurred 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 of the company’s stock, valued at $49,007,086.83. This represents a 9.05% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 21,810 shares of company stock worth $10,110,874. 0.03% of the stock is currently owned by insiders.

Microsoft News Summary Here are the key news stories impacting Microsoft this week:

Positive Sentiment: Bank of America raised its price target to $600 from $500 and maintained a Buy rating. The bank cited accelerating cloud growth, improving AI efficiency and better visibility into returns on investment. Its thesis includes approximately 43% Azure growth and more than 30 million paid Copilot seats, implying substantial upside. Microsoft’s AI strategy accelerates cloud growth and efficiency: analysts Positive Sentiment: Microsoft expanded its HUMAIN partnership in the Middle East and Africa. The companies plan to combine HUMAIN ONE with Microsoft 365 Copilot and IQ capabilities for as many as one million enterprise users, while also bringing Arabic-language AI models to Microsoft’s ecosystem. The deal supports Microsoft’s international AI distribution and enterprise monetization strategy. Microsoft extends HUMAIN tie up Positive Sentiment: Analysts and financial media continue to view Microsoft as a leading hyperscaler, citing Azure demand, Copilot adoption, strong cash generation and a valuation that remains reasonable relative to its growth prospects. Technical coverage also places MSFT in or near a potential buy zone after its recent rally. Why Microsoft’s stock could rally another 20% Neutral Sentiment: Microsoft customers can now deploy Laurel through the Microsoft Marketplace, adding another application to the company’s enterprise distribution ecosystem, though the immediate financial effect was not disclosed. Laurel Now Available in the Microsoft Marketplace Negative Sentiment: Microsoft 365 and Outlook outages persisted into a second day. Although service appeared to be improving, prolonged disruptions could frustrate enterprise customers and raise questions about reliability. Microsoft 365 outage drags on Negative Sentiment: Investors remain focused on Microsoft’s approximately $116 billion in fiscal 2026 property and equipment spending. Continued AI infrastructure investment may support long-term growth but could pressure depreciation, margins and returns if demand fails to keep pace. Rising interest rates and Windows 11 update problems add further near-term risk. Microsoft Trading Down 1.2% Shares of NASDAQ MSFT opened at $501.02 on Wednesday. Microsoft Corporation has a twelve month low of $349.20 and a twelve month high of $553.72. The stock has a market cap of $3.72 trillion, a price-to-earnings ratio of 27.90, a P/E/G 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. The company’s fifty day moving average is $436.21 and its 200-day moving average is $413.78.

Microsoft (NASDAQ:MSFT – Get Free Report) last issued 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. The business had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The firm’s revenue was up 17.7% compared to the same quarter last year. During the same quarter last year, the business posted $3.65 EPS. Equities research analysts predict that Microsoft Corporation will post 19.59 EPS for the current year.

Microsoft Dividend Announcement The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given a dividend of $0.91 per share. 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 currently 20.27%.

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).

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Someone just walked away from $36 million in Microsoft call spreads that still had over a year to pay off, and the question is whether that exit reveals doubt about where the stock goes from here or something far more…

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A CNBC segment on September 1, 2026 flagged something odd in Microsoft (NASDAQ:MSFT | MSFT Price Prediction) options activity. A single participant unwound two long-dated bullish call spreads for a combined credit of roughly $36 million, and the contracts still had over a year left to run before their December 2027 expiry.

That single trade is probably not a signal on its own. One trader closing one position is one decision by one participant with unknown motives, and the range of plausible reasons runs from a fund rebalancing to a risk manager cutting exposure to a considered call that Microsoft will not clear the higher strikes by then.

What is worth doing is putting the flow next to what Microsoft actually reported in July and asking whether the stock’s flat stretch this year is a pause or a repricing. The shares closed at $501.02 on Tuesday, up 8.02% over the past month but essentially flat over the past year at -0.3%.

What the Options Print Actually Tells You CNBC’s Oliver Renick described the trade this way: “Someone closed out two bullish call spreads a 595 to 705 spread worth 19 million and a 610 to 725 worth about 17 million. The trades spanned more than 30,000 call contracts, for a total credit of about 36 million.”

A call spread is a bet that a stock climbs above one strike but not much past a higher one, capping both risk and reward. Closing it for a credit means the holder took money off the table rather than waiting to see whether Microsoft clears the upper strike by expiry.

Renick added that “these were still very far out of the money contracts. But they also were for December 2027 expiry. So it’s interesting not just because they were two of the top three biggest trades on the entire tape today, but because they still had plenty of time to work.”

Broader sentiment does not look bearish. The full-chain put/call ratio sits at 0.55, and the December 2027 expiry itself shows a put/call ratio of just 0.02 with call volume of 34,372.

One trader’s exit is a single data point, and the fundamentals are where the actual argument lives.

Azure and Copilot Are Doing the Heavy Lifting On the same segment, Jason Snipe made the bull case in one sentence: “Azure is now 100 billion business. Azure revenue was up 43% year over year. And copilot adoption is improving 30 million paid seats.”

Those company-reported figures come from Microsoft’s fiscal Q4 2026 report on July 29, 2026, in which revenue of $90.01 billion beat estimates by 2.71%, and non-GAAP EPS of $4.74 was the fifth consecutive beat.

Commercial remaining performance obligations reached $678 billion, up 84%. That backlog is the single most important number in the report because it turns AI enthusiasm into contracted revenue with a weighted-average duration of 2.3 years.

Copilot is the softer piece of the thesis. Thirty million paid seats is a real adoption signal, but the disclosure says nothing about revenue per seat or renewal rates, and the shift to a per-seat-plus-consumption model means the unit economics are still being written.

Satya Nadella framed the quarter around efficiency: “We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results.”

Capex Bill Is the Real Debate Microsoft spent $115.948 billion on capital expenditures in fiscal 2026, up 79.62%, and management guided FY2027 capex to roughly $175 billion after an accounting shift.

Free cash flow fell 6.46% for the year even as operating cash flow grew 34.35%. That gap is the whole story, and it is why bulls with long-dated spreads might reasonably book profits.

Amy Hood argues the spend is flexible because CPUs and GPUs are short-lived assets, and “if the demand environment changes, you just slow down what is, in fact, the largest component.”

The counter is that Microsoft’s return on equity of 34.04% and operating margin of 46.78% reflect an earlier era when the business was capital-light. Gross margin fell to 67% in Q4 on Azure mix and AI infrastructure investment.

The flat one-year stock price, alongside 17.79% full-year revenue growth, suggests the market is already discounting some margin erosion.

Is MSFT Stock a Buy? Microsoft trades at a P/E of 28x, cheaper than it was a year ago and supported by a backlog most software companies would envy.

Against Amazon Web Services and Google Cloud, Azure is growing faster off a larger base, and the OpenAI relationship, now a 27% stake valued at approximately $135 billion with a $250 billion incremental Azure commitment, is a competitive moat neither has matched.

Oracle (NYSE:ORCL) has emerged as a real threat in raw AI capacity contracts, but it lacks the enterprise software distribution that lets Microsoft attach Copilot at scale.

The one closed trade on Tuesday does not change the thesis. It reflects one holder’s judgment that the upside case, Microsoft trading between $595 and $725 in late 2027, is worth converting into cash today.

The capex bill is real, and the near-term margin pressure is real, but the backlog, the Azure trajectory, and the pricing power in Copilot upgrades leave room for the stock to move higher over the next eighteen months. A $175 billion capex year also has to be powered and cooled by somebody, which is why we pulled together seven suppliers behind the data-center buildout in a free report on the AI infrastructure trade.

Contact [email protected] for any questions or corrections.

John Acunto, Napster CEO, joins "Bloomberg Tech" to talk about how Microsoft is helping the company reinvent itself through the use of agentic AI. He says the company is going from streaming music to streaming intelligence.

Microsoft just staged one of its sharpest recoveries in years, but a single unanswered question about its $115.9 billion spending spree will decide whether that momentum holds or collapses under its own weight.

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The trillion-dollar question hanging over Microsoft (NASDAQ:MSFT | MSFT Price Prediction) is whether its $115.9 billion AI capex bet earns a return worthy of a mega-cap multiple, or ends up as the largest overbuild in tech history. That answer determines where the stock goes over the next twelve months.

Our 24/7 Wall St. price target for Microsoft is $609.58, implying 18.7% upside from the current price of $513.53. We rate the shares a buy with high confidence at 90%.

24/7 Wall St. Price Target Summary Metric Value Current Price $513.53 24/7 Wall St. Price Target $609.58 Upside 18.7% Recommendation BUY Confidence Level 90% Azure Crossed $100 Billion and the Stock Woke Up Microsoft has recovered sharply. Shares are up 6.27% in the past week and 31.74% over the past month, though only 1.6% higher year over year after bottoming near $395 in July.

The fiscal Q4 report on July 29, 2026 delivered revenue of $90.01 billion, up 17.75%, non-GAAP EPS of $4.74, and Azure growth of 43%. Azure crossed $100 billion in annual revenue for the first time, and commercial RPO ballooned to $678 billion, up 84%. Q1 FY27 Azure guidance calls for approximately 45% constant-currency growth.

Bull Case: $700 or Higher The bull case rests on Copilot monetization accelerating alongside Azure supply catching up to demand. Microsoft 365 Copilot has passed 30 million paid seats, seat additions more than doubled quarter over quarter, and usage-based billing gives Satya Nadella a second monetization engine on top of per-seat pricing.

Foundry now has 100,000 customers, revenue has more than doubled year over year, and nearly 90% of the Fortune 500 are grounding agents through the platform.

Our bull-case one-year path lands at $709.58, or 38.18% upside, if Azure sustains 40%-plus growth and Copilot ARPU expands.

What Could Go Wrong The bear case starts with capex. FY26 capital spending hit $115.9 billion, up 79.62%, and free cash flow fell 6.46% for the year. Q4 EPS also benefited from a $3.2 billion Anthropic mark-up, flattering underlying business growth.

Management extended data-center useful life from 15 to 25 years, supporting FY27 margins and giving flexibility to slow COGS if demand softens. Our bear-case path still lands at $520.81, essentially flat.

How Microsoft Compares to Alphabet and Oracle Alphabet (NASDAQ:GOOGL) is the sharpest valuation counterpoint. Google Cloud grew 82% in Q2 2026 to $24.77 billion, yet Alphabet trades at a trailing P/E of just 15 against Microsoft’s 29. That gap makes our target look demanding on a relative basis, though Microsoft’s 40.31% net margin dwarfs peer profitability.

Oracle (NYSE:ORCL) is the pure-play AI infrastructure comp. Oracle’s IaaS revenue grew 93% and RPO reached $638 billion, larger than Microsoft’s commercial book, but Oracle burned $23.7 billion in negative free cash flow. Microsoft generates $66.99 billion in FCF while building at similar scale. On that basis, the peer group makes our 24/7 Wall St. price target reasonable rather than aggressive.

Microsoft Price Prediction 2026-2030 The 24/7 Wall St. price target of $609.58 and buy rating reflect a business monetizing AI in real time while retaining pricing power peers cannot match.

The setup looks constructive if Q1 FY27 Azure comes in at or above 45% constant-currency growth. Conviction weakens if capex intensity pushes free cash flow negative or Copilot seat additions stall.

Year 24/7 Wall St. Price Target 2026 $547 2027 $613 2028 $697 2029 $758 2030 $829 These projections assume Microsoft executes on Azure capacity and Copilot monetization. Significant upside or downside will come from the pace of AI ROI and whether hyperscaler capex intensity stabilizes. All of that spending has to be powered, cooled, and networked by somebody, and we profiled seven of those suppliers in a free report on the AI infrastructure buildout.

Contact [email protected] for any questions or corrections.

Investor concerns over software-sector weakness and excessive artificial intelligence spending are easing, giving Microsoft shares fresh momentum as Wall Street gains confidence in the company’s ability to turn its AI investments into returns.

Bank of America analyst Tal Liani believes the rally has further room to run.

In a Tuesday note, Liani maintained his Buy rating on Microsoft and lifted his price target to $600 from $500, implying roughly 20% upside from current levels.

The new target is based on 28 times Bank of America’s calendar 2027 earnings-per-share estimate, compared with 24 times previously.

The adjustment reflects accelerating cloud growth and improving visibility into AI investment returns.

Microsoft shares have gained nearly 30% since the end of July and recently recorded their strongest six-day stretch since October 2025.

The latest rally follows a strong fiscal fourth-quarter earnings report.

Azure revenue growth accelerated 43% year over year, while Microsoft's guidance for 45% growth in the current quarter exceeded Wall Street expectations.

The company is also seeing increasing adoption of its AI-powered Copilot products.

Liani noted that paid Copilot seats have surpassed 30 million, with net new additions more than doubling from the previous quarter.

For Liani, however, Microsoft's advantage goes beyond any individual AI model.

The company is increasingly building what he describes as a full-stack AI portfolio, combining its own models with offerings from third-party providers.

"Microsoft is building a broad portfolio of internal and external models, allowing customers to use the most cost-effective model for each task, while governing users actions," Liani said.

"Not every workload requires a complex and expensive frontier model, and Microsoft's approach helps optimize performance while reducing token consumption."

Rather than relying on a single model provider, Microsoft can route workloads according to their complexity and cost.

By employing a mix of internal and external models, "Microsoft can reserve the largest and most expensive models for complex tasks while serving high-volume, product-specific workloads more efficiently," Liani wrote.

That approach could help Microsoft reduce its exposure to the economics of any one provider while allowing Copilot to remain flexible as AI models evolve.

Liani also pointed to Microsoft's MAI-Code-1-Flash model, which he said delivers performance comparable to GPT-5.6 for common Excel tasks at a lower cost.

The strategy means Copilot's value does not "depend exclusively" on Anthropic, OpenAI or another individual model provider.

Microsoft is also attempting to improve AI economics at the infrastructure level.

Liani said engineering improvements across its CPU and GPU fleet, combined with software optimization, have increased throughput for Copilot workloads fourfold since the beginning of the year.

"Engineering improvements across Microsoft's CPU and GPU fleet, combined with software optimization, increased throughput for Copilot workloads by 4x since the beginning of the year," Liani wrote.

Microsoft is also developing custom silicon to reduce inference costs.

Its Maia 200 chip, which powers Microsoft AI models, is up to 40% cheaper to operate than traditional Nvidia hardware, according to the analyst.

These efficiency gains could become increasingly important as Microsoft brings additional AI capacity online.

Liani now expects Azure to grow 41.8% in fiscal 2027, compared with 39.9% in fiscal 2026.

"Continued execution on the capacity buildout, faster deployment and greater efficiency increase our confidence in Microsoft's ability to sustain Azure growth," he said.

The key question for investors is no longer simply whether Microsoft can spend enough to compete in AI.

It is whether the company can keep converting that spending into faster cloud growth and stronger economics. For now, Bank of America believes the answer is increasingly yes.

NEW YORK & SINGAPORE--(BUSINESS WIRE)-- #AI--Darwinbox today announced expansion of its Microsoft partnership, on the heels of the global launch of their latest innovation, Darwinbox Cortex™.

Microsoft’s relationship with OpenAI has been central to its artificial intelligence strategy, but a forthcoming model highlights a growing risk as more powerful AI may also become harder to deploy quickly.

OpenAI said on September 1 that Astra has reached the “Critical” cybersecurity capability threshold under its Preparedness Framework, the first OpenAI model to receive that designation.

Astra can identify previously unknown vulnerabilities and build working exploit chains against hardened systems with limited human guidance.

For MSFT investors, the issue is whether increasingly capable models require safeguards stringent enough to slow commercialisation across Azure and Copilot.

OpenAI says Astra represents a significant jump from GPT-5.6 Sol in cybersecurity.

During testing, the model discovered unknown vulnerabilities, built a browser-compromise chain that escaped a sandbox and identified weaknesses in a hardened operating system.

Those abilities could be valuable for cybersecurity, coding and autonomous agents. But OpenAI has imposed tighter controls because the same capabilities could be misused.

The company delayed parts of Astra’s development while strengthening protections. Advanced cyber functionality will initially be available only to a limited group, while monitoring systems can interrupt risky activity.

OpenAI acknowledges that safeguards may create more friction than desired at launch.

That matters because OpenAI remains important to Microsoft. Under an amended April agreement, Microsoft remains OpenAI’s primary cloud partner, retains model and product IP rights through 2032 and continues receiving revenue-sharing payments through 2030.

KeyBanc analyst Jackson Ader warned in July that Microsoft’s “partnership and quasi-ownership” of OpenAI creates dependence risk. He questioned whether OpenAI was a sufficiently “stable wagon” for Microsoft’s AI strategy.

Also read: OpenAI says its ads business has hit $1B run-rate

Bank of America analyst Tal Liani raised his Microsoft price target to $600 from $500 on September 1 while maintaining a Buy rating. His bullish case rests partly on Microsoft becoming model-agnostic.

According to MarketWatch, Liani said that Microsoft can “reserve the largest and most expensive models for complex tasks” while using cheaper models for high-volume workloads.

He also argued that Copilot’s value does not “depend exclusively” on OpenAI, Anthropic or any other provider.

Microsoft increasingly combines internal models with external ones, routing workloads according to cost, performance and complexity.

That flexibility matters if Astra proves difficult to deploy broadly. Microsoft can use it where its capabilities justify additional controls while directing routine workloads elsewhere.

D.A. Davidson analyst Gil Luria argues enterprises increasingly need an “orchestration layer” above frontier models so they can switch providers and route tasks based on cost, performance and risk.

“Microsoft has already built the orchestration layer – it is called Copilot,” Luria said in comments reported by TipRanks. He maintains a Buy rating and $550 target.

That view becomes more relevant as Astra requires stronger governance.

Enterprises may not simply want the most powerful model available. They may need software deciding which model can reach sensitive data, what actions an agent can perform and when a safer model should replace a more capable one.

For Microsoft, that could make Copilot’s control layer more valuable even as frontier AI becomes harder to deploy.

Astra is not inherently bearish for Microsoft. The risk is that powerful OpenAI models require tighter access, heavier monitoring or slower rollouts just as Wall Street expects AI monetisation to accelerate.

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.

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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.

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.

Trending

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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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.

Microsoft stock is underperforming the S&P 500 this year but Bank of America believes the tech giant's AI strategy means there's significant upside.

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."

watch now

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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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.

Read Next

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.

Read Next

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.

Read Next

Photo: Sudarsan Thobias / Shutterstock

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