Microsoft (MSFT 1.34%) stock fell after the company announced layoffs in its Xbox unit. Despite double-digit increases in revenue during the third quarter of fiscal 2026 (ended March 31), revenue in its Xbox unit decreased by 5% annually in that quarter, likely drawing attention to that segment.
The restructuring announcement is likely welcome news after the recent drop and could improve the company's financial performance. Nonetheless, investors should probably not expect a dramatic recovery in the tech stock because of this move. Here's why.
Image source: The Motley Fool.
Microsoft's ongoing struggles Admittedly, the Xbox unit looks like the obvious target for a restructuring, as it was Microsoft's worst-performing unit. Also, the division that oversees the Xbox unit, "More Personal Computing," reported a 1% annual decrease in revenue in fiscal Q3, even as Microsoft's overall revenue rose by 18% during the quarter.
To get Xbox on track, Microsoft is laying off 4,800 employees, a 2.1% reduction in its overall workforce. Also, four studios will go independent. It is quite possible these moves will stem the revenue declines for both Xbox and More Personal Computing overall.
Moreover, the company's P/E ratio has fallen to 23, just above multiyear lows. That arguably makes it a deep value stock, increasing the odds of a turnaround in Microsoft's stock price.
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Unfortunately for investors, the cloud has long driven the growth in Microsoft stock. Since Microsoft Cloud revenue increased by 29% over the last year, one might think the stock should be surging.
However, the earnings report glosses over challenges the company has faced with AI. Like its peers, Microsoft has spent heavily on capital expenditures (capex), allocating over $80 billion in the first nine months of fiscal 2026.
Unfortunately, Microsoft has relied heavily on OpenAI, which has burned cash at an alarming rate. Also, with around 45% of Microsoft's $627 billion backlog tied to OpenAI, Microsoft faces significant uncertainty.
Additionally, adoption of Copilot, Microsoft's AI-powered assistant, has underwhelmed the market with only about 4.7 million paid subscriptions in fiscal Q2, less than the 9 million for ChatGPT. This calls into question whether it can compete with OpenAI or peers such as Anthropic's Claude or Gemini, developed by Google parent Alphabet.
That factor also makes it less likely investors are watching the Xbox unit closely, which could mean the restructuring may go unnoticed.
Expect few changes in Microsoft stock Ultimately, restructuring the Xbox unit is unlikely to help Microsoft's stock.
On the surface, addressing the worst-performing business unit could make its financials appear more sound. Amid the company's falling P/E ratio, such a move should reduce stock losses.
Unfortunately, the company's deepest struggles with Microsoft's stock appear to stem from its AI performance relative to competitors'. Even though its AI adoption has grown, it appears that growth has lagged that of Anthropic or Google. That makes it increasingly likely that Microsoft will need to address that competitive gap for the stock to outperform the market for the foreseeable future.
Deadline Alert: Understanding Lead Plaintiff Selection Under the PSLRA in the Microsoft Corporation Securities Class Action
, /PRNewswire/ -- IMPORTANT DATE: August 11, 2026. Investors who purchased Microsoft Corporation (NASDAQ: MSFT) securities between May 1, 2025 and January 28, 2026 and wish to seek appointment as lead plaintiff must file a motion by this date. Start your claim now before the deadline. You may also contact Joseph E. Levi, Esq. at [email protected] or (212) 363-7500.
A securities class action is pending against Microsoft and four of its senior executives in the United States District Court for the Western District of Washington. The action alleges that defendants made materially false and misleading statements about the success, adoption, and performance of Microsoft's AI initiatives, including the Copilot product family and Azure cloud platform integration, while concealing significant technical and organizational problems. Microsoft stock traded above $550 per share during the Class Period before alleged concealed deficiencies surfaced.
What Is a Lead Plaintiff?
Under the Private Securities Litigation Reform Act of 1995 ("PSLRA"), the court appoints a lead plaintiff to represent the interests of all class members. The lead plaintiff is typically the investor or group of investors with the largest financial interest in the case who is otherwise adequate and typical of the class. In the Microsoft action, lead plaintiff applicants must demonstrate losses from purchases of MSFT securities between May 1, 2025 and January 28, 2026.
Lead Plaintiff Facts
The lead plaintiff selects and retains lead counsel to prosecute the case on behalf of the entire class Courts generally appoint the applicant with the largest provable financial loss during the Class Period There is no minimum loss threshold required to apply for lead plaintiff status Lead plaintiffs are not personally responsible for litigation costs; counsel works on a contingency basis The lead plaintiff deadline of August 11, 2026 applies only to those seeking this appointment, not to class membership generally Post-Deadline Procedures
After the August 11, 2026 deadline passes, the court will review all motions and appoint a lead plaintiff. The appointed lead plaintiff and lead counsel then guide the litigation through discovery, class certification, and potential settlement or trial. This process typically spans two to four years.
Absent Class Member Rights
Investors who do not seek lead plaintiff appointment are not excluded from the case. Absent class members retain the right to participate in any recovery obtained on behalf of the class. No action is required before the deadline to preserve class membership rights.
"The lead plaintiff process is designed to ensure the class is represented by shareholders with substantial interests in the outcome of the litigation. Investors with significant MSFT losses during the Class Period should evaluate whether seeking this role aligns with their objectives." -- Joseph E. Levi, Esq.
Find out if you qualify to recover losses or contact Joseph E. Levi, Esq. at [email protected] or (212) 363-7500.
Levi & Korsinsky, LLP | Top 50 Securities Firm | (212) 363-7500 | www.zlk.com
Frequently Asked Questions About the MSFT Lawsuit
Q: What is a lead plaintiff and why does it matter? A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.
Q: How do I know if I lost enough money to be the lead plaintiff? A: There is no minimum loss threshold. Courts appoint the investor with the largest provable loss who is willing and able to represent the class adequately. Contact Levi & Korsinsky before August 11, 2026 to evaluate.
Q: What documents do I need to make a claim? A: Brokerage statements or trade confirmations showing purchase dates, share quantities, prices paid, and any subsequent sale dates and prices.
Q: What if I missed the lead plaintiff deadline? A: The deadline applies only to investors seeking lead plaintiff appointment. Class members who miss it can still participate in any settlement or recovery.
Q: Do I need to go to court or give testimony? A: No. The overwhelming majority of class members never appear in court or give depositions. You submit a claim form to receive your portion of recovery.
Q: What does it cost me to participate? A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
[email protected]
Tel: (212) 363-7500
Fax: (212) 363-7171
The Microsoft logo is displayed on a smartphone screen placed on a reflective surface onto which the Department of War emblem is projected, in Creteil, France, on May 4, 2026. The Pentagon has signed agreements to integrate AI into its classified networks. (Photo by Samuel Boivin/NurPhoto via Getty Images)
NurPhoto via Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
What may seem like just another AI product reflects a fundamental and possibly profitable transformation in the company's revenue model.
Despite being a key player in the AI arena, Microsoft (MSFT) shares have remained surprisingly grounded. Over the last year, the stock has dropped approximately 20% and is trading 28% below its peak from the past 52 weeks. With so much emphasis on innovative features, you might be curious about what could genuinely drive a sustainable rise from this point.
The solution lies in a subtle yet significant change in the company’s overall business strategy, which has the potential to unveil a new layer of growth atop its considerable existing customer base.
The New Catalyst: A "Per User and Usage" ApproachFor many years, Microsoft primarily sold software. Now, it is transitioning to a model that sells results instead. The company’s leadership characterizes this transformation as shifting towards a "per user and usage business." Consider the implications of that. Selling a subscription for access to a tool is one thing; receiving compensation for every task that tool performs is entirely different. The objective goes beyond merely adding more users to capturing a portion of the value generated from the countless queries, reports, and summaries executed by its AI agents. If this model succeeds, it could drastically alter the valuation of each of Microsoft’s hundreds of millions of users.
Are There Actually Consumers Paying For This?A robust strategy is one aspect, but execution is another matter altogether. Initial indications for this new model can be seen from its AI initiative: Microsoft 365 Copilot. The company has now achieved "over 20 million paid seats for Microsoft 365 Copilot," with numbers rapidly increasing. In the latest quarter, seat additions surged by 250% year-over-year, marking the fastest growth since the product was introduced. This is not a hypothetical scenario; it represents a genuine and growing customer base that is swiftly adopting the consumption-based solutions that signify the company’s future. We have also examined how this could affect the stock's valuation. For those preferring to invest in the entire technology sector rather than betting on one large corporation, a tech ETF like VGT includes Microsoft among its top holdings.
MORE FOR YOU
The Investment Amount Is $190 BillionMicrosoft is reinforcing this strategic pivot with a massive influx of capital. The company anticipates spending around $190 billion on capital expenditures in the calendar year 2026 alone. This substantial amount is earmarked for constructing the global infrastructure necessary to support all that new, paid usage, exceeding merely the establishment of additional data centers. The company has been transparent that even with this expenditure, robust customer demand continues to surpass available capacity. This exemplifies a classic growth narrative: invest significantly to satisfy overwhelming demand that can be directly monetized. This spending is the clearest indication of management’s confidence in the future of a per-user, per-usage model.
Microsoft is not merely undergoing another product cycle; it’s attempting to fundamentally rewire its entire business relationship with its customers. The premise is that by integrating AI agents into the everyday routines of nearly every office worker worldwide, it can generate a new, sustainable, and lucrative revenue stream that compounds over the years. The necessary components are in place, the investment is secure, and the initial wave of customers is already committing to spend.
Where Will An Opportunity Like This Appear First?An opportunity of this nature only becomes significant once it is reflected in the figures, with the first clear indication appearing in management’s forecasts. When a company can genuinely perceive the new revenue materializing, it adjusts its projections upwards, and an increased forecast rewarded by the market serves as one of the clearest validations that a scenario like this is becoming reality. Federal Realty Investment Trust (FRT), Fortinet (FTNT), and GE Vernova (GEV) are currently exhibiting precisely that signal.
What’s A Good Way To Support A Narrative Like This?A credible growth narrative warrants action, but engaging through one stock entails accepting every setback that may be faced by that single company. The more strategic approach is to maintain a diverse selection of stocks where the long-term prospects are equally strong, ensuring that the enduring upside remains intact and that no single surprise can derail it. This is the method by which patient capital grows.
The Trefis High Quality (HQ) Portfolio evaluates the entire landscape of quality across thousands of stocks, rather than focusing on a single driver, holding the 30 strongest cases, and regularly rebalancing them with discipline. It has a proven history of outperforming a benchmark combining the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.
Microsoft's shares are not being punished for weak demand but for the lack of clear evidence that AI CapEx is already turning into margins and EPS growth. The key inflection signal is simply a narrowing gap between cloud revenue growth and COGS growth, rather than another leg of Azure acceleration. Incremental cloud margins still show dilution, with new cloud revenue profitable but not yet strong enough to lift overall cloud margins.
Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) and Microsoft (NASDAQ:MSFT) both reported earnings on April 29, 2026, and the results now read very differently after this week’s news that Microsoft is replacing OpenAI and Anthropic models with its own MAI system inside Excel and Outlook. One company is defending margins. The other is compounding them.
Full Stack Google vs. a Microsoft Rebuild Google’s Q1 FY2026 was carried by owned infrastructure. Cloud revenue jumped to $20.03 billion, up 63%, with backlog nearly doubling to over $460 billion. Gemini is now processing more than 16 billion tokens per minute via API, up 60% quarter over quarter. Sundar Pichai told investors “Our AI investments and full stack approach are lighting up every part of the business.” The proprietary TPU 8t and 8i silicon powering that stack is the reason margins held at 36.1% despite capex more than doubling.
Microsoft’s Q3 FY2026 was strong on paper. Revenue hit $82.89 billion, up 18.3%, Azure grew 40%, and the AI run rate reached $37 billion, up 123% year over year. But Satya Nadella is now paying twice: once to OpenAI, once to build MAI. The Bloomberg report says tens of thousands of weekly prompts are already routing through Microsoft’s own models to cut cost.
Where the Margin Math Actually Diverges Lens Google Microsoft AI silicon Owned TPUs Third party GPUs Model dependency Gemini (in house) Transitioning to MAI-Thinking-1 Cloud growth 63% 40% YTD stock move +17.41% -19.24% A podcast source framed it plainly: Nvidia partners command roughly 70% margins, while Google’s TPU economics run closer to 40% to 50%. That gap defines the entire competitive setup.
The Next Test Is Whether MAI Can Actually Scale I will be watching how quickly Microsoft can move Copilot workloads onto MAI without breaking the enterprise experience. Reddit chatter is already noting Copilot functionality issues, and Polymarket traders give Microsoft only a 53% probability of outvaluing OpenAI plus Anthropic by year end. For Google, the risk is capex discipline. Q2 capex above $40 billion carries an 86% probability on Polymarket.
Why I Lean Toward Google Right Now You are looking at two very different setups. Google is a vertically integrated cash machine trading at a mid-teens P/E, up 108.2% over a year, with owned silicon absorbing the AI compute bill. Microsoft is mid rebuild, with a securities fraud class action and 4,800 job cuts already in the headlines. On the current evidence, the compounder profile screens more favorably than the turnaround profile. If MAI-Thinking-1 proves out at scale over the next two quarters, I will reconsider. Until then, Google is winning the AI unit economics fight, and the stock chart agrees.
NEW YORK, July 08, 2026 (GLOBE NEWSWIRE) -- Bronstein, Gewirtz & Grossman, LLC, a nationally recognized investor-rights law firm, announces that a class action lawsuit has been filed against Microsoft Corporation (NASDAQ: MSFT) and certain of its officers.
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Microsoft securities between May 1, 2025 and January 28, 2026, both dates inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: bgandg.com/MSFT.
Microsoft Case Details
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements because they failed to disclose that:
(1) Microsoft’s Copilot family of products had experienced significant brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems;
(2) Microsoft’s flagship proprietary AI model ranked well below competitors on a number of benchmark tests;
(3) Microsoft needed to increase by billions of dollars its capital expenditures and divert graphics processing unit (“GPU”) and central processing unit (“CPU”) capacity away from fulfilling demand for its profitable Azure services in order to improve the competitive positioning of its critical Copilot family of products and increase its AI-related research and development (“R&D”); and
(4) as a result of the above, Microsoft had failed to convert a significant percentage of its commercial Microsoft 365 users to paid Copilot subscriptions and Microsoft’s Copilot offerings had lost market share to rival products, a trend that was increasing.
What's Next for Microsoft Investors?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: bgandg.com/MSFT. or you may contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC at 917-590-0911. If you suffered a loss in Microsoft you have until August 11, 2026, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.
No Cost to Microsoft Investors
We, Bronstein, Gewirtz & Grossman LLC, represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman, LLC for Microsoft Securities Class Action?
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide. More at www.bgandg.com
"Our practice centers on restoring investor capital and ensuring corporate accountability, which serves to uphold the essential integrity of the marketplace," said Peretz Bronstein, Founding Partner of Bronstein, Gewirtz & Grossman, LLC.
Follow us for updates on LinkedIn, X, Facebook, or Instagram.
Contact Info
Peretz Bronstein, Esq. or Nathan Miller
Bronstein, Gewirtz & Grossman, LLC
917-590-0911 | [email protected]
Attorney advertising.
Prior results do not guarantee similar outcomes.
BENSALEM, Pa. , July 08, 2026 (GLOBE NEWSWIRE) -- Law Offices of Howard G. Smith reminds investors that class action lawsuits have been filed on behalf of shareholders of the following publicly-traded companies. Investors have until the deadlines listed below to file a lead plaintiff motion.
Investors suffering losses on their investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in these class actions at (215) 638-4847 or by email to [email protected].
Erasca, Inc. (NASDAQ: ERAS)
Class Period: January 14, 2025 – April 26, 2026
Lead Plaintiff Deadline: August 10, 2026
The complaint alleges that throughout the Class Period the defendants made false and/or misleading statements and/or failed to disclose that: (1) ERAS-0015’s preclinical data was based on improper comparisons to RevMed and placed Erasca at risk of violating patent and trade secret protections; and (2) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
Nano-X Imaging Ltd. (NASDAQ: NNOX)
Class Period: March 31, 2025 – April 17, 2026
Lead Plaintiff Deadline: August 11, 2026
The complaint alleges that throughout the Class Period the defendants made false and/or misleading statements and/or failed to disclose that: (1) Defendants overstated purported efficiency gains achieved in Nano-X’s operations, as well as the purported increased demand for its products; (2) in reality, Nano-X’s production and manufacturing operations were poorly aligned with demand for the Company’s products; (3) as a result, Nano-X was experiencing significantly increased operating expenses and cash burn; (4) the foregoing significantly increased the likelihood that Nano-X would be forced to take disruptive remedial measures with respect to its manufacturing operations, entailing significant restructuring and impairment charges; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
Microsoft Corporation (NASDAQ: MSFT)
Class Period: May 1, 2025 – January 28, 2026
Lead Plaintiff Deadline: August 11, 2026
The complaint alleges that throughout the Class Period the defendants made false and/or misleading statements and/or failed to disclose: (1) that Microsoft’s Copilot family of products had experienced significant brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems; (2) that Microsoft’s flagship proprietary AI model ranked well below competitors on a number of benchmark tests; (3) that Microsoft needed to increase by billions of dollars its capital expenditures and divert GPU and CPU capacity away from fulfilling demand for its profitable Azure services in order to improve the competitive positioning of its critical Copilot family of products and increase its AI-related R&D; (4) that, as a result of the foregoing, Microsoft had failed to convert a significant percentage of its commercial Microsoft 365 users to paid Copilot subscriptions and the Company’s Copilot offerings had lost market share to rival products, a trend that was increasing; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
Black Rock Coffee Bar, Inc. (NASDAQ: BRCB)
Class Period: September 12, 2025 – May 12, 2026
Lead Plaintiff Deadline: August 17, 2026
The complaint alleges that throughout the Class Period the defendants made false and/or misleading statements and/or failed to disclose: (1) Black Rock Coffee’s new store openings were leading to a cannibalization of its existing services and revenue; (2) Black Rock Coffee overstated the manner in which its expansion strategy was tailored to avoid “sales transfer”; (3) as a result of “sales transfer,” the Company’s financial results were materially impacted; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
To be a member of these class actions, you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about these class actions, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847 or by email to [email protected], or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
215-638-4847
888-638-4847 [email protected]
www.howardsmithlaw.com
The market has had an up-and-down year, but there are a few stocks that are taking a bigger beating than most. Microsoft (MSFT 1.33%) and Meta Platforms (META 2.16%) are two major underperformers in the tech realm, and have lost investors' money in 2026. So far, Meta is down around 12%, while Microsoft is nearly down 20%.
That's some poor performance from two stocks that have been historically great investments, and I think each could turn it around and be excellent performers before 2026 is over. Here's why.
Image source: Getty Images.
Microsoft It's hard not to appreciate Microsoft's strategy in the artificial intelligence (AI) era. It has several strategies, and all of them seem to be paying off just fine. The launch of Copilot has been incredibly successful, and this business now has $37 billion in annual revenue, growing at a 123% year-over-year pace. This allows its business productivity tools to integrate seamlessly with AI and boost productivity.
However, if clients turn sour on Copilot, it also has a thriving cloud computing division that's powering AI workflows. Azure grew at a 40% year-over-year pace in its most recent quarter, showcasing strong demand for computing infrastructure. So, even if its own internal AI tools don't pan out, it can benefit from other companies building great AI products on its platform.
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Lastly, Microsoft is a major OpenAI investor and owns around 27% of the company. Rumors are starting to swirl of an impending OpenAI IPO, and it could be worth more than $1 trillion when it hits the public market, giving Microsoft a massive payday if it chooses to sell its stake.
Microsoft is really doing great as a company, yet the market doesn't agree. It now trades for 20.2 times forward earnings, which is less than the S&P 500 at 21.7. Microsoft's reputation, growth, and strategy don't reflect a stock that should trade at a discount to the broader market, and I think it could easily rebound through the second half of 2026 as a result.
Meta Platforms Meta is in a similar boat to Microsoft, as it's valued at just 17.9 times forward earnings, but it may have earned at least a portion of its undervaluation compared to the S&P 500. Meta is likely better known by its former name, Facebook. However, with the collapse of the metaverse, Meta would likely be better off changing its name back to Facebook, as it's more representative of the company that it is.
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Nearly all of its revenue comes from advertising on its social media platforms like Facebook, Instagram, Threads, and WhatsApp. In Q1, its revenue increased at a 33% year-over-year pace. However, the market doesn't really care about how good its core business is doing. Instead, it's focused on how much it's spending on AI infrastructure. Meta is pouring hundreds of billions into AI, yet it really isn't generating much of a return on investment outside of the improvements it has made to its advertising platform.
That's the primary reason why the market is bearish on the stock, but that could easily turn around if Meta can deliver on its promise to make a superintelligent model that interacts with the world around you via AI glasses. If Meta can deliver that, the stock could easily turn around. However, it may be a few years away.
In the meantime, Meta is a strong advertising business that investors should be mostly focused on. However, that's not current market sentiment, and this mismatch can give investors the edge they need to make great long-term returns with Meta's stock, as the market will eventually come back around to valuing the advertising business for the dominant company that it is.
Artificial intelligence (AI) investing has been a winning investment theme during the past four years. Since the AI build-out kicked off in 2023, several of these stocks have been major winners. However, 2026's winners have been a bit more selective, with some companies doing incredibly well, while others are not doing as well.
Overall, I think the AI investment picture is still strong, and this theme will dominate the market for the rest of 2026, into 2027, and beyond until at least 2030. That means some of these stocks will be able to go much higher. If you're looking for which AI stocks are the best buys for the rest of 2026, I think this list is a great place to start, as they could go higher still.
Image source: Getty Images.
Micron Micron (MU 5.25%) may seem like an odd one to include on this list, in part because its stock has more than tripled this year. However, demand for Micron's core products, NAND and DRAM memory chips, is off the charts, and it doesn't expect market conditions to change through the calendar year 2027. That means Micron can continue to deliver unprecedented growth and thrive from the lack of memory chip supply.
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Micron's stock only trades for 13.6 times this year's earnings and 6.6 times next year's earnings, so buying today could lock in major returns by the end of 2027 if tightness in the memory chip market persists.
Nebius Nebius (NBIS 8.30%) has also had a strong year on the back of downright incredible growth. Nebius is a neocloud provider, which means it focuses on AI-first cloud computing. Demand for its product has been insatiable, and it delivered 684% revenue growth in Q1. Wall Street analysts expect another strong quarter in Q2, with 459% growth anticipated.
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For 2026 and 2027, Wall Street projects 544% and 234% revenue growth. With this tiny company rapidly expanding into an AI computing giant, now is the perfect time to jump on the shares, because if the AI build-out lasts through the end of this decade, Nebius has a lot higher to go.
Nvidia Nvidia (NVDA +0.62%) has been the top AI stock pick since 2023, and nothing has changed since then. The industry still relies on its graphic processing units (GPUs), and Nvidia's revenue was forecast to double year over year in Q2. However, the stock has gone on sale, and it's down about 17% from its all-time highs.
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Buying opportunities don't come around all that often for Nvidia stock, and now is the perfect time to load up on the shares, especially with its price tag at about 22 times forward earnings -- a good deal less than the S&P 500 (^GSPC 0.45%).
Microsoft Next is Microsoft (MSFT +0.59%), which has had a terrible run during the past year. It has fallen about 30% from its all-time highs, leading many investors to believe that its AI strategy isn't panning out. However, with a 27% stake in OpenAI (projected to go public later this year at a valuation of more than $1 trillion), its AI business producing an annual recurring revenue of $37 billion growing at a 123% pace, and a 40% cloud computing growth rate, I think it's safe to say that Microsoft is doing just fine.
However, its stock is dirt cheap at 20 times forward earnings.
MSFT PE Ratio (Forward) data by YCharts
With it being far cheaper than the S&P 500 and growing at a solid pace, I think it's the perfect stock to buy now.
Meta Platforms The market hasn't been kind to Meta Platforms (META +2.59%) either, as investor focus on the huge amount of money Meta is spending on AI without accounting for the tremendous growth its ad business has delivered. In Q1, Meta's revenue rose 33%, yet the stock has been pretty steady off its all-time highs. Meta is down about 25% from its all-time high, and also trades for a cheap price tag like Microsoft.
META PE Ratio (Forward) data by YCharts
At just 18 times forward earnings, Meta looks like an incredible bargain, and could be a strong candidate to be a top-performing AI stock in the second half of 2026 as the market comes around to its AI plan.
The idea of buying and holding stocks forever can feel a bit cliché at times. The reality is that it's extraordinarily difficult to find stocks worthy of permanent spots in your portfolio. It's even more challenging when you apply that to growth stocks, which investors often find in emerging industries where it's uncertain which companies will lead or for how long.
That said, there's no harm in doing the exercise. After all, there aren't any rules against selling later on if things don't work out. In the meantime, this mindset will hone your focus on looking for the very best companies the market has to offer.
Ready to start? Already ahead of you. Nvidia (NVDA +0.62%), Microsoft (MSFT +0.59%), and Meta Platforms (META +2.59%) jump off the page as entrenched tech stalwarts with significant artificial intelligence (AI) growth potential, which might ultimately be one of the biggest investment opportunities of this generation.
Image source: Getty Images.
Nvidia is entrenched as the gold standard of AI compute Once the data center supercycle began, Nvidia's graphics processing units (GPUs) quickly became the de facto chips for training AI models. That continues and has made Nvidia the world's largest tech company in the process. Although competition from custom silicon chips has crept in, it hasn't derailed Nvidia's blistering growth. CEO Jensen Huang has noted that Nvidia anticipates more than $1 trillion in orders through next year for its flagship Grace Blackwell and upcoming Vera Rubin chip platforms.
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Eventually, the data center boom will slow. But Nvidia will likely remain a top AI stock because of all the directions it can still go as AI investment and innovation expand beyond data centers. Nvidia has its sights set on physical AI, with software and hardware ecosystems built for autonomous vehicles and humanoid robotics. The company recently expanded its partnership with Palantir Technologies to give the U.S. government and other critical tech infrastructure operators access to Nvidia's GPUs and open-source AI models on Palantir's application software.
In the meantime, Nvidia is raking in billions of dollars in cash flow from its GPU sales, and that figure is rising quickly as Nvidia's explosive growth continues. Jensen Huang had Nvidia ready to dominate the AI market from day one, so it's difficult to bet against him as he guides Nvidia into an exciting but volatile AI future.
Microsoft has the inside track on AI at the enterprise level You can't stay atop the tech world without evolving. Microsoft has continued to learn new tricks over the years, from personal computer software to cloud computing and AI, all while its legacy products remained relevant and continue to have strong pricing power. Today, countless companies, from small businesses to massive corporations, depend on Microsoft's software products and cloud computing services in one form or another.
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Microsoft's various offerings make it a one-stop shop for enterprises, creating powerful network effects. Is Microsoft always the best at everything? No, but it's often easier and cheaper for enterprises to use whatever Microsoft offers than to go outside the ecosystem to another vendor. Like with other previous innovations, Microsoft has an inside track to sell AI technology, as it can simply roll it out to customers.
Admittedly, Microsoft's AI app, Copilot, has struggled to gain traction. But the company is pivoting after initially relying too heavily on its partnership with OpenAI. Microsoft's entrenched advantages are powerful, so when the smoke clears, it shouldn't surprise anyone if the company does just fine with AI. Despite the criticisms, Microsoft's Azure currently has $625 billion in commercial remaining performance obligations, suggesting the business is doing just fine.
Meta Platforms is an advertising juggernaut built on social media dominance There aren't many publicly traded monopolies you can invest in, but Meta Platforms might be one of them. Its social media apps, Facebook, Instagram, WhatsApp, and Threads, combine for 3.56 billion daily active users. This massive user base generates a ton of first-party data that Meta leverages to serve ads, a highly lucrative business model that continues to grow by leaps and bounds.
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Co-founder Mark Zuckerberg is still the CEO and is only 42 years old, a rarity for such a successful company. Mark Zuckerberg swings for the fences. It doesn't always work -- just look at Reality Labs -- but he also acquired Instagram and WhatsApp. The company's all-out push into AI has strengthened its core advertising business while opening new growth opportunities in cloud computing and AI glasses.
Meta Platforms isn't a stock for everyone. Its social media apps have attracted criticism and lawsuits for their addictive nature. Despite all that, Meta Platforms is such a strong advertising company that it can afford huge mistakes and still deliver double-digit growth year in and year out. That's a business worth buying and holding, especially with such seasoned but young leadership.
NEW YORK, July 08, 2026 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that a class action lawsuit has been filed against Microsoft Corporation (NASDAQ:MSFT) and certain of the Company’s senior executives for securities fraud after its significant stock drop resulting from potential violations of the federal securities laws.
If you invested in Microsoft, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/microsoft-class-action-lawsuit.
Key Details of the Microsoft ($MSFT) Class Action:
Lead Plaintiff Deadline: August 11, 2026Alleged Misconduct: Securities fraud alleging that Microsoft misled investors regarding its Azure cloud computing platform and AI chatbot CopilotStock Drop: January 28, 2026 – 10% Stock DropCourt: U.S. District Court for the Western District of WashingtonAction: Contact BFA Law to discuss your rights
Investors have until August 11, 2026 to ask the Court to be appointed to lead the case. The complaint asserts securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in Microsoft common stock. The class action is pending in the U.S. District Court for the Western District of Washington. It is captioned City of St. Clair Shores Police and Fire Retirement System, et al., No. 26-cv-02071.
Why is Microsoft Being Sued for Securities Fraud?
Microsoft is a multinational technology company that develops software, cloud services, and devices. In recent years, Microsoft’s cloud computing platform named Azure has been Microsoft’s main growth driver. A key reason for Azure’s recent growth is Microsoft’s multi-billion-dollar investment into AI, including the development of its own generative AI chatbot named Copilot.
According to the complaint, during the relevant period, Microsoft consistently touted Copilot’s best-in-class capabilities, which purportedly drove widespread and growing user adoption. Copilot’s apparent success allowed Microsoft to report surging Azure-related revenue.
As alleged, in truth, Copilot suffered from severe functionality issues that caused user adoption to decline and put Microsoft’s Azure revenue at risk.
Why did Microsoft’s Stock Drop?
On January 28, 2026, Microsoft announced disappointing 2Q 2026 financial results and that Azure growth had slowed suddenly. Microsoft also allegedly revealed for the first time that the number of Microsoft 365 Copilot premium customers totaled only 15 million, materially below analyst estimates.
This news caused the price of Microsoft common stock to decline $48.13 per share, or 10%, from $481.63 per share on January 28, 2026, to $433.50 per share on January 29, 2026.
Additionally, on February 3, 2026, The Wall Street Journal reported in an article titled “Microsoft’s Pivotal AI Product Is Running Into Big Problems” that severe challenges and functionality issues had plagued Copilot, causing the application to lose market share. Specifically, The Wall Street Journal reported that “[c]onfusing brand positioning and interoperability problems have frustrated users.”
Click here for more information: https://www.bfalaw.com/cases/microsoft-class-action-lawsuit.
What Can You Do?
If you invested in Microsoft, you may have legal options and are encouraged to submit your information to the firm.
All representation is on a contingency fee basis; there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses.
BFA is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It has been named a top plaintiff law firm by Chambers USA, The Legal 500, and ISS SCAS, and its attorneys have been named “Elite Trial Lawyers” by the National Law Journal, “Litigation Stars” by Benchmark Litigation, among the top “500 Leading Plaintiff Financial Lawyers” by Lawdragon, “Titans of the Plaintiffs’ Bar” by Law360 and “SuperLawyers” by Thomson Reuters.
Most recently, The Legal 500 awarded BFA the most client satisfaction accolades of any plaintiff’s securities litigation law firm, with clients noting: “[t]here is no better service provider in the practice area,” “[t]he interest of the client is always front and center,” and “[t]here isn’t a better firm in this space.” One testimonial described the firm as “nimble and entrepreneurial,” with a “relentless focus on adding value for clients.”
Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors, as well as $420 million from Teva Pharmaceutical Ind. Ltd.
For more information about BFA and its attorneys, please visit https://www.bfalaw.com.
Turning $500,000 into $100,000 of annual income requires a 20% yield, and no durable, diversified income portfolio should be built around that assumption. Anyone quoting a number that high is usually taking on extreme risk, relying on leverage, or handing back some of your own capital. The dividend-growth formula solves a different equation. It accepts a smaller paycheck today in exchange for the possibility of a much larger one in 10, 20, or 30 years.
Why $500,000 Cannot Produce Six Figures Today The equation is fixed: income target divided by yield equals capital required. Run it at three realistic tiers and the shortfall on $500K is obvious.
Conservative (3% to 4%): Blue-chip dividend growers and broad equity income. $100,000 divided by 0.035 equals about $2.86 million; at 4%, $2.5 million. Diversified and durable, but $500K produces roughly $17,500 in year one. Moderate (5% to 7%): REITs, preferred shares, midstream energy partnerships, covered-call funds. $100,000 divided by 0.06 equals about $1.67 million. Distribution growth slows or stalls, and inflation gnaws at real income. Aggressive (8% to 14%): Business development companies, mortgage REITs, leveraged option-income vehicles. $100,000 divided by 0.10 equals $1 million; at 12%, roughly $833,000. Principal frequently erodes, and cuts arrive first in downturns. The 10-year Treasury near 4.4% pays about $22,000 on $500K, risk-free. That is the realistic starting point. Every path to six figures from here runs through time, not yield.
The Compounding Math of Rising Payouts A 3.5% starting yield growing 8% per year doubles the income in roughly nine years, quadruples it in eighteen, and pushes yield-on-cost above 15% around year twenty-five. Reinvest dividends along the way and the curve bends steeper. The meaningful number is the growth rate of the payout multiplied by the years you hold it.
The historical record on real payers makes this tangible. Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) paid a Q1 dividend of $0.33 in 2006 and $1.30 in Q1 2026, with 27+ consecutive years of increases visible in the data. Procter & Gamble (NYSE:PG) went from a $0.285 quarterly dividend in Q1 1999 to $1.0885 in Q2 2026, its 70th consecutive annual raise. McDonald’s (NYSE:MCD) raised its quarterly payout from $0.375 in early 2008 to $1.86 in 2026. Investors who bought any of these two decades ago now collect a yield-on-cost that dwarfs anything a covered-call fund offers.
Where the Formula Points Next The low-yield, high-growth end of the spectrum matters as much as the aristocrats. Microsoft (NASDAQ:MSFT) yields only 1%, yet the quarterly dividend rose from $0.39 in 2017 to $0.91 by late 2025. Visa (NYSE:V) yields roughly 0.8% and has raised the payout every year since 2008, most recently to $0.67 quarterly. Optically underwhelming today, mathematically dominant on a twenty-year horizon.
Blend a small allocation of names like these with a larger core of aristocrats and $500K can plausibly generate a six-figure real income stream by the time an early-fifties saver reaches their mid-seventies, especially with reinvestment during the accumulation phase.
Three Steps Before You Build the Portfolio Calculate actual spending, not gross salary. Per-capita disposable personal income was $68,391 in Q1 2026, according to BEA data reported through FRED, but that is a national per-person average, not a household retirement target. Many households need to replace less than a $100,000 paycheck once payroll taxes, retirement contributions, and work-related costs disappear. Compare total returns of a dividend-growth fund against a 10%-yielding option-income fund over the same period. Include reinvested dividends, taxes, payout changes, and ending net asset value. The high-yield product may look better at first, but the decade-long result depends on whether its payout is supported by durable earnings or offset by NAV erosion.
Model the tax drag at each tier. Qualified dividends from many dividend-growth stocks may receive lower federal rates when IRS holding-period rules are met. BDC and mortgage REIT distributions are often largely ordinary income, though tax character can vary by year. That matters more when CPI is already up 4.2% over the 12 months ending in May 2026. $500,000 can still become a six-figure income machine, but not by pretending a 20% yield is normal. The realistic path is a long runway, reinvestment, and a portfolio of companies that can keep raising the check. The first year may look disappointing. The real payoff is what the income stream can become after years of compounding.
Contact [email protected] for any questions or corrections.
NEW YORK, July 07, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Microsoft Corporation (“Microsoft” or the “Company”) (NASDAQ: MSFT). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
The class action concerns whether Microsoft and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
You have until August 11, 2026, to ask the Court to appoint you as Lead Plaintiff for the class if you purchased or otherwise acquired Microsoft securities during the Class Period. A copy of the Complaint can be obtained at www.pomerantzlaw.com.
[Click here for information about joining the class action]
On January 28, 2026, Microsoft announced disappointing results for its fiscal second quarter ended December 31, 2025. First, during the quarter Microsoft’s Azure growth had slowed suddenly and fallen below analyst expectations. During the related earnings call, CFO Amy E. Hood revealed that the slower Azure growth was primarily due to computational capacity constraints, as Microsoft had diverted CPU and GPU capacity to Copilot applications and AI-related R&D. Second, Microsoft revealed that its capital expenditures had increased to $37.5 billion during the quarter, causing Microsoft’s capital expenditures for the first six months of its fiscal 2026 to increase to $72.4 billion compared to $88.2 billion for all of Microsoft’s fiscal 2025. Third, Microsoft revealed, for the first time, that the number of paid Microsoft 365 Copilot seats totaled only 15 million to date, materially below analyst estimates and a fraction of the more than 450 million commercial Microsoft 365 users.
On this news, the price of Microsoft stock fell nearly 10%.
Then, on February 3, 2026, The Wall Street Journal revealed, in an article titled “Microsoft’s Pivotal AI Product Is Running Into Big Problems,” that severe challenges and functionality issues had plagued Microsoft’s Copilot offerings, leading to Copilot losing market share during the Class Period to competing products such as Google’s Gemini. The price of Microsoft stock continued to fall in the days after Microsoft’s second quarter 2026 earnings announcement as the market continued to digest the adverse news and sources such as The Wall Street Journal revealed new adverse information.
Thereafter, on March 17, 2026, The Wall Street Journal revealed in an article titled “Microsoft Seeks More Coherence in AI Efforts With Copilot Reorganization” that Microsoft was reorganizing its Copilot product teams to unify commercial and consumer versions partly in response to the challenges revealed by The Wall Street Journal’s prior reporting on Copilot’s problem-plagued development and disappointing customer adoption.
On this news, the price of Microsoft stock continued to fall.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
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Microsoft (MSFT +0.59%) has a massive business with many products and services. And while its overall operations continue to grow and do well, some areas of its business are lagging.
One area that frequently posts underwhelming results is gaming, with the company's Xbox segment typically struggling to show much growth. Microsoft hasn't turned a blind eye to that, and recently made a major announcement as it looks to shake up that area of its business.
Image source: Getty Images.
Microsoft cuts thousands of jobs as it focuses on improving its Xbox division On Monday, Microsoft announced it would be eliminating 4,800 positions, representing just over 2% of its workforce. The bulk of those cuts pertain to its Xbox business, with 3,200 job losses in that area. Xbox CEO Asha Sharma was blunt, saying that "our business today is not healthy," pointing out the poor return on its investments in game studios, noting that "in a typical year, we lost 64 cents for every dollar we invested."
Those kinds of losses are alarming, particularly for a company such as Microsoft, which seemingly has no problem turning a profit. Over the trailing 12 months, the tech company has generated $125 billion in profit on $318 billion in revenue.
Sharma said in a memo that "we must reset Xbox" in order to become more efficient. While the job cuts are not due to artificial intelligence, Sharma believes there are significant complexities across many layers of management that can be drastically reduced. Not only could that cut costs, but it may also speed up decision-making and enable the business to be much more competitive.
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Restructuring Xbox could be an underrated growth catalyst for Microsoft Despite being one of the most popular gaming consoles in the world, Xbox's business has struggled to generate consistent growth for Microsoft. During the first three months of this year, the segment's revenue was down 7% on a foreign-exchange-adjusted basis. And in the previous period, it was down by 6%. Gaming is a huge opportunity for Microsoft, as there are about 200 million monthly active Xbox users and more than 500 million across the company's entire gaming ecosystem.
If the company can find a way to enhance that area of its business, it could not only strengthen its growth rate but also improve its bottom line, making this terrific stock an even better investment than it already is today. Microsoft has been doing exceptionally well with a sluggish Xbox division. If it's able to turn that around, then there can be plenty of upside for Microsoft's stock in both the short and long term.
Microsoft CEO Satya Nadella. Sven Hoppe/picture alliance via Getty Images Microsoft is offering laid-off US employees up to 39 weeks' base pay for most US employees, according to severance offers reviewed by Business Insider.
Microsoft on Monday announced plans to lay off around 4,800 employees, or 2.1% of its global workforce, confirming Business Insider's earlier report.
The US severance package includes a minimum of 60 days of base pay, during which employees will remain on the payroll, up to a maximum of 39 weeks of base pay for most employees, based on seniority and tenure.
Employees at internal levels 64 and below will receive one week of base pay per six months of service, and employees at levels 65 to 67 will receive two weeks of base pay per six months of service. There's a separate package for executives levels 68 and higher.
The company is also offering continued regular stock vesting for six or 12 months for levels 67 and below, based on years of service, and six months of paid health insurance coverage plus an additional 12 months of optional COBRA coverage.
Those terms are similar to those the company offered earlier this year in its Voluntary Retirement Program buyouts, according to a document viewed by Business Insider, except that the layoffs include shorter health insurance coverage durations.
The layoffs come as Microsoft cuts costs and plans significant spending, including $190 billion in capital expenditures this year, primarily related to its AI infrastructure buildout.
The cuts mostly impact the sales and Xbox gaming organizations, Microsoft chief people officer Amy Coleman wrote in an email to employees. Microsoft's Xbox division also plans to cut 20% of its workforce by the end of June.
A maximum of 39 weeks of severance appears more generous than offers from some competing tech companies.
Salesforce, which recently conducted layoffs, has a standard severance package of a minimum of nine weeks and a maximum of 30 weeks of base pay. Oracle offered laid-off US employees four weeks' base salary, plus one week per additional year of employment, up to 26 weeks, as severance.
Meta, meanwhile, recently offered laid-off US employees a severance package including 16 weeks — or four months — in base pay, plus two weeks for every year of continuous employment.
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One line from Microsoft (NASDAQ:MSFT | MSFT Price Prediction) CEO Satya Nadella on the April earnings call reframed the entire debate over how quickly generative AI can turn into a real profit-and-loss line. The company’s AI business now operates at scale, and the growth rate suggests the ramp is still in its early innings.
The Number $37 billion. That is Microsoft’s AI annual revenue run rate as of the fiscal third quarter of 2026, reported in the company’s 8-K filed April 29, 2026. On Microsoft’s recent earnings call, Nadella stated it plainly: “Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year over year.”
This is a company disclosure of a run-rate metric, distinct from reported GAAP revenue and from forward guidance. It also reflects annualized current-quarter run rate as defined by management.
What It Means A 123% year-over-year jump on a base this large is the operational headline. It sits inside a broader cloud engine that is accelerating with it. Intelligent Cloud revenue reached $34.681 billion, up 30%, and Azure grew 40% in constant currency. Microsoft Cloud clocked $54.5 billion in the quarter, up 29%.
The demand behind the run rate is visible in Microsoft’s reported backlog. Commercial remaining performance obligations hit $627 billion, nearly doubling year over year at 99% growth. That is contracted revenue queued up for future delivery. On top of this key figure, capital expenditures came in at $30.876 billion, up 84.39% year over year. That’s the amount Microsoft has set aside to fund its AI data centers which support that backlog. Copilot adoption is the other tell. Paid seats crossed 20 million, up 250% year over year, with Accenture alone taking 740,000 seats.
Market Reaction Shares of Microsoft traded at $428.00 at the April 29 filing, closed at $414.44 one day later, and reached $450.24 thirty days after the report. As of July 2, 2026, the stock closed at $390.49, with a one-week gain of 10.67% off a lower base and a one-year decline of 19.85%. The stock’s 10-year return of 763.3% puts the recent pullback in context for long-term holders.
Bull Case Microsoft’s bull case rests on scale, mix, and durability.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
In terms of scale, a $37 billion AI run rate compounding at triple digits is generating cash flow now, with operating cash flow of $46.679 billion in the quarter, up 26.01%. The company’s mix has also improved, with consolidated operating margin sits at 46%, and CFO Amy Hood told investors AI margins are “better and have remained better in our AI business versus where we saw them in the cloud transition looking back.” And on durability, there’s plenty for Microsoft investors to like. Capacity is sold out, with management saying it expects to remain capacity-constrained “at least through 2026.”
The ROI question that hangs over hyperscaler capex was answered directly. Nadella responded recently that, “When the TAM is so expansive and when shortages are generally growing between supply and demand, it gives you a lot of confidence in the ROI.” The chip supplier picture reinforces the demand signal. NVIDIA (NASDAQ:NVDA) is up 24.06% over the past year, closing at $194.83 on July 2, 2026, on continued AI infrastructure orders.
Analyst View Analyst sentiment aligns with the operational picture. Microsoft carries 12 strong buys, 40 buys, 3 holds, and zero sell ratings, with an analyst target price of $561.11 against a share price near $390. Forward P/E stands at 20.
Bottom Line For long-term holders, the $37 billion AI run rate is the pivot point in the Microsoft story. It converts the capex debate from theoretical to arithmetic. The $627 billion commercial backlog and 20 million paid Copilot seats provide the revenue lines that the roughly $190 billion in calendar 2026 planned capex is meant to serve.
Microsoft’s 12-month drawdown coexists with an AI franchise scaling at a rate few software businesses ever have. That gap between price action and operating trajectory is where patient investors tend to find their edge.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Image Credits:JASON REDMOND/AFP / Getty Images As AI costs continue to rise, companies are looking for ways to cut back. The most recent example is Microsoft, which has reportedly begun to deploy a cost-savings strategy by relying less on software from OpenAI and Anthropic and instead deploying its own in-house models.
Indeed, when it comes to two of its most widely used programs — Excel and Word — Microsoft has begun to use its homemade MAI models to respond to a certain percentage of user prompts, Bloomberg reported Tuesday. In the past, the company had advertised the fact that large parts of Office 365 are powered by models from both OpenAI and Anthropic.
While Microsoft still relies on those third-party models, it has also increasingly sought to stand up its own AI agents. Last month, at its annual Build conference, the company announced the launch of seven new MAI models, including an agentic coder and a text-to-image generator.
When reached for comment by TechCrunch, Microsoft said that it had nothing further to share.
Microsoft’s apparent cutbacks are part of a broader trend. After a brief blitz of “tokenmaxxing” earlier this year, the last few months have seen a news cycle awash in stories about tech companies acting significantly more thrifty. Other large companies — like Amazon, Uber, Meta, and Accenture — have also reportedly made moves to curb spending.
The immense cost of providing and buying AI services has become a controversial part of the industry. The sticker shock has gotten so bad in some parts of Silicon Valley that some companies are reportedly looking to Chinese models for more affordable agentic solutions — despite some concerns over potential security issues.
Microsoft Corp.'s Xbox plans to eliminate 3,200 jobs, or around 20% of its staff over the next year, as part of a massive reorganization to spur growth in the struggling gaming division. Xbox will also divest four of its video-game development studios and is beginning the process to part ways with a fifth.
WHY: Rosen Law Firm, a global investor rights law firm, reminds purchasers of common stock of Microsoft Corporation (NASDAQ: MSFT) between May 1, 2025 and January 28, 2026, inclusive (the “Class Period”), of the important August 11, 2026 lead plaintiff deadline.
SO WHAT: If you purchased Microsoft common stock during the Class Period you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement.
WHAT TO DO NEXT: To join the Microsoft class action, go to https://rosenlegal.com/cases/microsoft-corporation/join or call Phillip Kim, Esq. toll-free at 866-767-3653 or email [email protected] for information on the class action. A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than August 11, 2026. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.
WHY ROSEN LAW: We encourage investors to select qualified counsel with a track record of success in leadership roles. Often, firms issuing notices do not have comparable experience, resources, or any meaningful peer recognition. Many of these firms do not actually handle securities class actions, but are merely middlemen that refer clients or partner with law firms that actually litigate the cases. Be wise in selecting counsel. The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm has achieved the largest ever securities class action settlement against a Chinese Company. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 4 each year since 2013 and has recovered billions of dollars for investors. In 2019 alone the firm secured over $438 million for investors. In 2020, founding partner Laurence Rosen was named by law360 as a Titan of Plaintiffs’ Bar. Many of the firm’s attorneys have been recognized by Lawdragon and Super Lawyers.
DETAILS OF THE CASE: According to the lawsuit, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (1) Microsoft’s Copilot family of products had experienced significant brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems; (2) Microsoft’s flagship proprietary AI model ranked well below competitors on a number of benchmark tests; (3) Microsoft needed to increase by billions of dollars its capital expenditures and divert graphics processing unit (“GPU”) and central processing unit (“CPU”) capacity away from fulfilling demand for its profitable Azure services in order to improve the competitive positioning of its critical Copilot family of products and increase its AI-related research and development (“R&D”); and (4) as a result, Microsoft had failed to convert a significant percentage of its commercial Microsoft 365 users to paid Copilot subscriptions and Microsoft’s Copilot offerings had lost market share to rival products, a trend that was increasing. When the true details entered the market, the lawsuit claims that investors suffered damages.
To join the Microsoft class action, go to https://rosenlegal.com/cases/microsoft-corporation/join or call Phillip Kim, Esq. toll-free at 866-767-3653 or email [email protected] for information on the class action.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.
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NEW YORK & NEW ORLEANS--(BUSINESS WIRE)--Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Microsoft Corporation (“Microsoft” or the “Company”) (NasdaqGS: MSFT).
In recent years, Microsoft’s cloud computing platform, known as Azure, has been its main growth driver providing customers with computing, networking, storage, mobile and web application services, artificial intelligence (“AI”), Internet of Things, cognitive services, and machine learning. In 2023, the Company introduced its own proprietary generative AI chatbot, Microsoft Copilot, subsequently highlighting the purported success of Copilot and its foray into AI development, claiming that Copilot offered best-in-class capabilities and enjoyed widespread and growing user adoption.
However, on January 28, 2026, the Company disclosed disappointing results for its fiscal second quarter ended December 31, 2025, including slower than expected growth of Azure. According to the Company, this was due to computational capacity constraints, as the Company had diverted central processing unit ("CPU") and graphics processing unit ("GPU") capacity to Copilot applications and AI-related research and development, while drastically increasing capital expenditures attributed to AI-related R&D, Copilot development, and capacity buildout costs. Further, growth of paid Copilot seats was far below analyst estimates and a fraction of the more than 450 million commercial Microsoft 365 users.
Thereafter, the Company and certain of its executives were sued in a securities class action lawsuit, charging them with failing to disclose material information during the class period in violation of federal securities laws, which remains ongoing.
KSF’s investigation is focusing on whether Microsoft’s officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws.
If you have information that would assist KSF in its investigation, or have been a long-term holder of Microsoft shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-833-938-0905 or email KSF Managing Partner Lewis Kahn ([email protected]), or visit https://www.ksfcounsel.com/cases/nasdaqgs-msft/ to learn more.
About Kahn Swick & Foti, LLC
KSF, whose partners include former Louisiana Attorney General Charles C. Foti, Jr., is one of the nation’s premier boutique securities litigation law firms. This past year, KSF was ranked by SCAS among the top 10 firms nationally based upon total settlement value. KSF serves a variety of clients, including public and private institutional investors, and retail investors - in seeking recoveries for investment losses emanating from corporate fraud or malfeasance by publicly traded companies. KSF has offices in New York, Delaware, California, Louisiana, Chicago, and a representative office in Luxembourg.
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To learn more about KSF, you may visit www.ksfcounsel.com.
Microsoft Corporation remains fundamentally strong, with Q3 2026 revenues up 18% y/y and robust cloud and AI-driven growth. MSFT's share price decline of over 20% is attributed to negative investor sentiment and AI capex skepticism, not deteriorating business performance. Azure and cloud segments continue to outperform, with Azure growing 40% y/y and AI annual run rate surging 123% y/y to $37B.
Megan Brantley from @LikeFolio discusses Microsoft (MSFT) as the stock stays trapped in a bear market. Her firm's data shows consumer trends remain consistent for the Mag 7 company even as shares struggle to break free from a downtrend.
All year, Michael Burry has been shorting AI. He bought put options against Nvidia. He shorted Palantir. He posted on Substack in May comparing the current market to the last months of 1999. If you followed his moves in 2026, you were building a pretty clear picture of where he stood.
On June 25, he blew that picture up. Burry’s firm Scion Asset Management disclosed it had bought December 2028 LEAP call options on Microsoft with a strike price in the low $700s. Microsoft was trading around $356 at the time. He is betting it will nearly double before the end of 2028.
What Michael Burry’s Microsoft LEAP options bet actually meansGetting to $700 is not enough on its own. The options only become profitable once Microsoft clears the strike price plus whatever premium Burry paid for the contracts. Fall short of that by December 2028 and the entire premium is gone.
Burry explained his thinking in the Substack post. He wrote that “$350 level for Microsoft is a good place to buy” and described the longer-dated options as cheap relative to his outlook. LEAPs let him express that conviction without committing the capital a straight stock purchase would require.
How much capital he actually committed is unknown. Scion Asset Management chose to deregister from the SEC on November 10, 2025, wound down its outside investor capital, and moved to a family office structure. The June 25 Substack post had no contract counts or dollar figures. Nobody outside Scion knows whether this is a small speculative position or a major allocation.
Why Microsoft stock fell 32% even as its AI revenue hit $37 billionMicrosoft stock dropped roughly 32% from its July 2025 peak of $550.83 going into Burry’s disclosure. Azure cloud revenue grew 40% in its most recent quarter. Annualized AI revenue crossed $37 billion, up 123% year over year. More than 80% of Fortune 500 companies run workloads on Azure. None of that stopped the stock from falling.
The culprit was the spending plan. Microsoft committed to $190 billion in capital expenditures for 2026, nearly all of it going into AI infrastructure. Shares fell over 3% in after-hours trading on that news even though earnings came in above expectations. Investors are not disputing the revenue. They are worried about how many years of heavy spending come before the returns show up.
Burry pushed back on that read in his Substack. He called 2026’s software selloff a product of “reflexive market dynamics,” a feedback loop between declining stock prices and stress in the bank debt market, not a sign of businesses deteriorating. He used the same logic to justify his long positions in Adobe and PayPal, both of which also sold off hard this year.
The Microsoft AI business Burry is betting will reach $700 by 2028Azure hosts OpenAI’s models and serves as the cloud backbone for a growing share of enterprise AI workloads. GitHub Copilot runs inside the daily workflows of millions of developers. Microsoft 365 Copilot, which costs $30 per user per month on top of existing enterprise licenses, has crossed 20 million commercial seats.
The contracted revenue sitting behind all of that came in at $627 billion in the most recent quarter, up 99% year over year including OpenAI. About 25% of that gets recognized over the next 12 months, up 39% from a year ago.
What retail investors should know before copying Michael Burry’s LEAP tradePeople copy Burry. They did it with the housing short. They did it with GameStop. Some made money. Many got the timing wrong and did not. LEAPs add another layer of risk that stock trades do not carry.
If Microsoft closes at $650 in December 2028, a shareholder is up roughly 80%. Burry’s options expire worthless. A strong, multi-year rally that stops short of $700 plus premium still wipes out the position. There is no partial credit.
Buying Microsoft shares directly gets you exposure to the same thesis Burry laid out, with no expiration date working against you. At around $360, the stock trades at roughly 28 times forward earnings, below where it was before the 2026 selloff. If the business keeps compounding the way the last few quarters suggest, shareholders capture that without needing a near-doubling by a specific date.
Burry said as much himself. He described $350 as a good entry for common stock buyers and framed the LEAPs as the vehicle that made sense for his own outlook and structure. That is a meaningful distinction. Retail investors who buy the options because Burry did, without matching his conviction or his ability to absorb a total loss on the premium, are taking on a very different bet than the one he made.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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LOS ANGELES, July 07, 2026 (GLOBE NEWSWIRE) -- The Schall Law Firm, a national shareholder rights litigation firm, reminds investors of a class action lawsuit against Microsoft Corporation (“Microsoft” or “the Company”) (NASDAQ: MSFT) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.
Investors who purchased the Company’s securities between May 1, 2025 and January 28, 2026, inclusive (the “Class Period”), are encouraged to contact the firm before August 11, 2026.
If you are a shareholder who suffered a loss, click here to participate.
We also encourage you to contact Brian Schall of the Schall Law Firm, 2049 Century Park East, Suite 2460, Los Angeles, CA 90067, at 310-301-3335, to discuss your rights free of charge. You can also reach us through the firm's website at www.schallfirm.com, or by email at [email protected].
The class, in this case, has not yet been certified, and until certification occurs, you are not represented by an attorney. If you choose to take no action, you can remain an absent class member.
According to the Complaint, the Company made false and misleading statements to the market. Microsoft’s Copilot AI products suffered from problems ranging from poor user experience to capacity limitations. The Company’s AI model ranked poorly against competitors on industry benchmark tests. The Company would need to spend billions on capital expenditures related to AI including diverting hardware away from profitable business units to improve its competitive posture in artificial intelligence. The Company was incapable of converting a large percentage of Microsoft 365 users to paid Copilot subscriptions, losing market share to rivals. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Microsoft, investors suffered damages.
Join the case to recover your losses.
The Schall Law Firm represents investors around the world and specializes in securities class action lawsuits and shareholder rights litigation.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and rules of ethics.
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Meta Platforms (NASDAQ: META | META Price Prediction) and Microsoft (NASDAQ: MSFT) both reported earnings on April 29, 2026, and both have been punished in 2026 despite operational strength. Meta is off 11.54% year to date; Microsoft has fared worse at down 18.9%. The market is asking which Mag 7 titan is truly the bargain.
Ad Engine Roars. Azure Backlog Balloons. Meta delivered a jaw-dropping quarter: revenue of $56.31 billion (+33.1% YoY) and EPS of $10.44 vs. $6.66 consensus. A $8.03 billion tax benefit flattered the bottom line, but the underlying ad engine is genuinely hot, with ad impressions up 19% and price per ad up 12% across a family reaching 3.56 billion daily users.
Microsoft’s headline was steadier. Revenue landed at $82.89 billion (+18.3%) with EPS of $4.27, a fourth straight beat. The real story is contracted demand. Commercial RPO nearly doubled to $627 billion, and the AI business hit a $37 billion annualized run rate, up 123% YoY. Azure alone grew 40%.
Business Driver Meta Microsoft Growth engine Ad pricing + impressions Azure + AI Copilots Visibility Spot ad market $627B contracted backlog Soft spot Reality Labs $4.03B loss PC segment down 1% One Owns the Model. One Rents the Rails. Meta is vertically integrated. Zuckerberg said the quarter marked “the release of our first model from Meta Superintelligence Labs” and reiterated a plan to “deliver personal superintelligence to billions of people.” Nadella framed Microsoft’s role differently, pointing to “cloud and AI infrastructure and solutions” for the agentic era, anchored by a restructured OpenAI stake worth roughly $135 billion.
Valuation is where the divergence bites. Meta trades at roughly 18x forward earnings with a 0.80 PEG ratio, while Microsoft carries a trailing P/E of 23. Both are spending furiously: Meta guided FY26 CapEx to $125 to $145 billion, and Microsoft’s calendar 2026 CapEx is tracking toward $190 billion.
The Next Test Is Cash Flow Under CapEx Pressure I will watch whether Meta can monetize excess AI compute by renting it out, a tactical pivot that could turn its build into near-term revenue. For Microsoft, the question is whether Azure growth can keep outrunning a CapEx line that has expanded 84% YoY. Prediction markets already reflect the strain, giving META a 75.5% probability of outvaluing OpenAI by year-end.
Why I Lean Meta Over Microsoft Right Now If you want defensible cash flow, ad pricing power, and a discount to peers, Meta is the cleaner setup for me today. Its ad monopoly funds the AI build without leaning on a partner. Microsoft remains fundamentally sound, and the 10.67% bounce this past week suggests bargain hunters agree. But if I can only own one at these prices, Meta’s combination of 30.2% ROE and a cheaper multiple wins. I would change my view if Reality Labs losses widen materially in Q2.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
New York, New York--(Newsfile Corp. - July 7, 2026) - Bronstein, Gewirtz & Grossman, LLC, a nationally recognized investor-rights law firm, announces that a class action lawsuit has been filed against Microsoft Corporation (NASDAQ: MSFT) and certain of its officers.
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Microsoft securities between May 1, 2025 and January 28, 2026, both dates inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: bgandg.com/MSFT.
Microsoft Case Details
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements because they failed to disclose that:
Microsoft's Copilot family of products had experienced significant brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems; Microsoft's flagship proprietary AI model ranked well below competitors on a number of benchmark tests; Microsoft needed to increase by billions of dollars its capital expenditures and divert graphics processing unit ("GPU") and central processing unit ("CPU") capacity away from fulfilling demand for its profitable Azure services in order to improve the competitive positioning of its critical Copilot family of products and increase its AI-related research and development ("R&D"); and as a result of the above, Microsoft had failed to convert a significant percentage of its commercial Microsoft 365 users to paid Copilot subscriptions and Microsoft's Copilot offerings had lost market share to rival products, a trend that was increasing.What's Next for Microsoft Investors?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm's site: bgandg.com/MSFT, or you may contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC at 917-590-0911. If you suffered a loss in Microsoft you have until August 11, 2026, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.
No Cost to Microsoft Investors
We, Bronstein, Gewirtz & Grossman LLC, represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys' fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman, LLC for Microsoft Securities Class Action?
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide. More at www.bgandg.com
"Our practice centers on restoring investor capital and ensuring corporate accountability, which serves to uphold the essential integrity of the marketplace," said Peretz Bronstein, Founding Partner of Bronstein, Gewirtz & Grossman, LLC.
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Microsoft (NASDAQ:MSFT | MSFT Price Prediction) has quietly built a $37 billion AI business, yet the stock has done the opposite of what you would expect. Shares of Microsoft closed at $390.49, down 18.9% YTD, while Azure grew 40% and commercial backlog nearly doubled to $627 billion.
Satya Nadella runs one of the most profitable software franchises ever assembled. So why is the stock below where it started the year? And can it climb to $500 by July 2027?
The Real Reason Microsoft Is Down 18.9% This Year MSFT peaked near $520 in August 2025 and has not recovered. Shares are down 11.52% over the past month, 18.9% YTD, and 19.85% over one year. The drawdown exceeds what a beta of 1.13 would suggest.
Two forces weigh on the stock. Capital expenditure jumped 84% to $30.88 billion last quarter, with payback years away. Rising OpenAI investment losses hit $3.1 billion in Q1 FY26 versus $523 million a year earlier. Broader Magnificent 7 selling has erased trillions in mega-cap value, dragging multiples lower even as earnings accelerate.
Wall Street Sees 44% Upside. Our Model Says 28% Consensus analyst target sits at $561.11, implying roughly 44% upside. Of 56 analysts, 13 rate Strong Buy, 40 Buy, 3 Hold, and zero Sell. That is 95% bullish, zero bearish. Our model lands at $500.63 in twelve months, an upside of 28.21% with 90% confidence.
The optimistic case runs to $600.50 and the bear case sits at $444.73. Analysts anchor to peak-2025 multiples that may not snap back this year. Our lower call reflects the mega-cap dampener in the 247Factor and the reality that a $2.9 trillion company re-rates slowly. If earnings growth of 23.4% YoY holds, Wall Street eventually wins.
The Path to $500 Per Share Reaching $500 from today’s price of $390.49 requires a gain of 28%. With forward EPS of $18.89, a price of $500 implies a forward P/E of 27x. Our base case of $500.63 already implies 24x, meaning the bold target requires 2.4x of additional multiple expansion.
Microsoft has topped EPS estimates four consecutive quarters. Earnings grew 23.4% YoY, and the AI business runs at a $37 billion annualized rate, up 123% YoY. Commercial RPO of $627 billion, up 99% YoY backstops the next several years of revenue. Nadella stated directly on the last call: “Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.”
If Azure holds near +40% and forward EPS drifts toward $20, the multiple resets. Main risk: capex intensity compressing margins if AI monetization lags.
Where Microsoft Trades Today vs Its Earnings Power At $390.49 and forward EPS of $18.89, MSFT trades at 21x forward earnings. That is a discount to the trailing P/E of 23 and below where mega-cap software normally clears. Operating margin sits at 45.62% and ROE at 33.28%.
Shares are 11% off the 52-week low of $349.20 and 29% below the $551.05 high. The ten-year return of 763.3% shows what compounding at scale delivers. Shares trade at a discount to historical multiples for one of the highest-quality software franchises in the market.
Is $500 Realistic? Here’s My Take Reaching $500 requires a gain of 28% from $390.49. Realistic, and arguably the base case.
Three things need to go right. Azure must hold near +40% growth. Forward EPS estimates need to drift toward $20. Mega-cap multiples need to firm as the AI capex cycle proves out. What derails it: a slowdown in enterprise AI adoption combined with capex-driven margin compression. We’ve outlined the blueprint for how Microsoft could reach $500 in 2027.
As Microsoft Corp. (NASDAQ: MSFT) stock rebounded from a crucial multi-year support level over the past two weeks, Gil Luria, a Wall Street analyst at D.A. Davidson, reiterated bullish sentiment.
Luria maintained a ‘Buy’ rating for MSFT stock and kept his 12-month price target at $550, in a note to clients analyzed by Finbold on July 7. The new target implies a potential upside of approximately 42.21% from the current share price of $386.74.
In his research note, Luria highlighted Microsoft’s Copilot as a mature component for democratizing AI models. Looking ahead, the analyst identified deeper integration of open-source models as a critical next step to catalyze a MSFT stock bull rally.
The analyst acknowledged MSFT stock continues to face a competitive landscape, noting that NVIDIA Corp. (NASDAQ: NVDA) has shown strong interest in filling the open-source integration space, and that Meta Platforms Inc. (NASDAQ: META) could potentially re-enter the arena.
Despite these risks, Luria remains confident in MAFT stock positioning. Furthermore, he believes Chinese AI models are unlikely to gain significant traction in the American enterprise. The current geopolitical and bilateral dynamics between the United States and China could limit the mainstream adoption of Chinese AI models.
MSFT stock price forecast and outlook Following Luria’s stance to maintain a bullish outlook on his MSFT share price forecast, the average target from 37 analysts surveyed by TipRanks over the last three months was $560,97 at the time of reporting.
Microsoft stock price forecast. Source: TipRanks Microsoft has received a strong buy rating from Wall Street analysts, as more S&P 100 index companies signal bullish sentiment. Year to date (YTD), the company’s stock has rebounded twice from its multi-year support level around $356.77 to trading at $386.74 at press time.
MSFT stock YTD. Source: Finbold As part of the S&P 100 index, MSFT stock could attract more buyers amid the ongoing AI boom.
A securities fraud class action lawsuit has been filed on behalf of Microsoft investors after its stock plummeted 10% because Microsoft allegedly misled investors regarding its AI chatbot Copilot and cloud computing platform Azure.
, /PRNewswire/ -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that a class action lawsuit has been filed against Microsoft Corporation (NASDAQ:MSFT) and certain of the Company's senior executives for securities fraud after its significant stock drop resulting from potential violations of the federal securities laws.
If you invested in Microsoft, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/microsoft-class-action-lawsuit.
Key Details of the Microsoft ($MSFT) Class Action:
Lead Plaintiff Deadline: August 11, 2026 Alleged Misconduct: Securities fraud alleging that Microsoft misled investors regarding its Azure cloud computing platform and AI chatbot Copilot Stock Drop: January 28, 2026 – 10% Stock Drop Court: U.S. District Court for the Western District of Washington Action: Contact BFA Law to discuss your rights Investors have until August 11, 2026 to ask the Court to be appointed to lead the case. The complaint asserts securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in Microsoft common stock. The class action is pending in the U.S. District Court for the Western District of Washington. It is captioned City of St. Clair Shores Police and Fire Retirement System, et al., No. 26-cv-02071.
Why is Microsoft Being Sued for Securities Fraud?
Microsoft is a multinational technology company that develops software, cloud services, and devices. In recent years, Microsoft's cloud computing platform named Azure has been Microsoft's main growth driver. A key reason for Azure's recent growth is Microsoft's multi-billion-dollar investment into AI, including the development of its own generative AI chatbot named Copilot.
According to the complaint, during the relevant period, Microsoft consistently touted Copilot's best-in-class capabilities, which purportedly drove widespread and growing user adoption. Copilot's apparent success allowed Microsoft to report surging Azure-related revenue.
As alleged, in truth, Copilot suffered from severe functionality issues that caused user adoption to decline and put Microsoft's Azure revenue at risk.
Why did Microsoft's Stock Drop?
On January 28, 2026, Microsoft announced disappointing 2Q 2026 financial results and that Azure growth had slowed suddenly. Microsoft also allegedly revealed for the first time that the number of Microsoft 365 Copilot premium customers totaled only 15 million, materially below analyst estimates.
This news caused the price of Microsoft common stock to decline $48.13 per share, or 10%, from $481.63 per share on January 28, 2026, to $433.50 per share on January 29, 2026.
Additionally, on February 3, 2026, The Wall Street Journal reported in an article titled "Microsoft's Pivotal AI Product Is Running Into Big Problems" that severe challenges and functionality issues had plagued Copilot, causing the application to lose market share. Specifically, The Wall Street Journal reported that "[c]onfusing brand positioning and interoperability problems have frustrated users."
Click here for more information: https://www.bfalaw.com/cases/microsoft-class-action-lawsuit.
What Can You Do?
If you invested in Microsoft, you may have legal options and are encouraged to submit your information to the firm.
All representation is on a contingency fee basis; there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses.
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Most recently, The Legal 500 awarded BFA the most client satisfaction accolades of any plaintiff's securities litigation law firm, with clients noting: "[t]here is no better service provider in the practice area," "[t]he interest of the client is always front and center," and "[t]here isn't a better firm in this space." One testimonial described the firm as "nimble and entrepreneurial," with a "relentless focus on adding value for clients."
Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.'s Board of Directors, as well as $420 million from Teva Pharmaceutical Ind. Ltd.
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Microsoft (MSFT 0.94%) and Apple (AAPL +1.36%) have been going head-to-head for decades.
*Stock prices used were the afternoon prices of July 3, 2026. The video was published on July 5, 2026.
Parkev Tatevosian, CFA has positions in Microsoft. The Motley Fool has positions in and recommends Apple 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.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT, NVDA 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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After three years of spectacular gains, technology companies faced a rockier path in the first half of this year -- particularly in the first quarter. Investors worried about the pace of spending on artificial intelligence (AI) and whether the revenue opportunity would make it all worthwhile. Turmoil in Iran also weighed on sentiment as energy prices rose and investors carefully watched U.S. economic reports -- and many of these reports prompted them to question the strength of the economy. All of these uncertainties pushed investors into a rotation out of certain AI stocks and into companies viewed as offering more revenue stability.
The situation brightened in the second quarter, as strong corporate earnings reports and work toward peace in Iran offered investors reason for optimism. The S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average even advanced in the double digits. And the Dow posted its best first half in five years.
But, during the first half, one particular tech stock had a difficult time. This giant was the worst-performing mega-cap in the Dow over that period. Is the company a stock to avoid, or is it offering investors a no-brainer buying opportunity right now? Let's find out.
Image source: Getty Images.
Platforms you may use daily Which company am I talking about? One that you probably know very well -- you may even use one of its key products daily at work or at home. I'm talking about Microsoft (MSFT 0.94%), owner of the Microsoft 365 suite of apps, including the immensely popular platforms Word and Excel.
Microsoft stock dropped about 20% in the first half of the year, posting the biggest loss of any mega-cap member of the Dow Jones Industrial Average. Why such a decline? Earlier in the year, as the abilities of AI models progressed, some investors started to worry that AI would eventually replace software. As a result, software stocks such as Microsoft slid.
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Now, I'll address this concern right away: It's very possible that AI could replace some software down the road -- but I wouldn't expect the Microsoft 365 suite to be part of this group. Companies have extensively integrated Microsoft's software into their operations, meaning it would be difficult, time-consuming, and costly to drop this platform in favor of another option. It's also important to note that Microsoft's software integrates AI, offering AI features such as Copilot to users. So as AI advances, Microsoft's software is likely to improve too.
Meanwhile, at home users of Microsoft may not be quick to shift out of their habits of writing on Microsoft Word, for example, and favor a new system. People tend to stick with what they feel most comfortable with -- and many people have been using Microsoft's software for decades.
AI as a valuable partner So I don't think AI represents a major threat to Microsoft, and instead, it may even be a valuable partner. On top of this, Microsoft's cloud business is significantly benefiting from AI as it offers AI products and services to its customers. In the recent quarter, the company said its AI business soared 123% to exceed an annual revenue run rate of $37 billion. As a cloud leader and a key partner of OpenAI -- Microsoft has invested about $13 billion in the AI lab -- Microsoft is well-positioned to win in the coming chapters of the AI story.
Of course, Microsoft stock may not soar as much as a young, up-and-coming AI stock, but that's OK. The company has a profile that may suit a broad range of investors: Its earnings track record will impress cautious investors, and its exposure to AI will please growth investors. And this combination should support stock performance over the long run.
Meanwhile, Microsoft looks dirt cheap at 20x forward earnings estimates, making this Dow Jones stock a no-brainer buy right now.
Xbox is doing a "reset," but can it reboot the business?
Microsoft's gaming brand cut 1,600 employees on Monday, with an additional round of layoffs expected before June 2027, according to an employee memo from Xbox CEO Asha Sharma. The layoffs are part of a massive restructuring by Microsoft, which is cutting about 2.1% of its total workforce, or roughly 4,800 employees.
Approximately 350 people affected are from four gaming studios that Xbox plans to offload to outside management: Compulsion Games, Double Fine, Ninja Theory and Undead Labs, all of which were bought within the last eight years. A fifth, Arkane Studios in France, could also be sold or spun off.
Sharma, who took over Microsoft's gaming division in February, said in her statement that Xbox's business operation is "not healthy," that costs are too high and the customer base too low. She said Game Pass -- a monthly subscription that provides access to Xbox's collection of games -- and the company's in-house portfolio of games has not grown fast enough.
Over the past few months, Sharma seemed to acknowledge Xbox's weaknesses and pushed changes to address them, including lowering the price of the subscription service.
Xbox has had a tumultuous history, rising to dominate earlier console generations before falling to Sony and Nintendo in the last decade. The original Xbox console launched on Nov. 15, 2001, to compete with Sony's PlayStation 2 and the Nintendo GameCube.
While Xbox console sales were at or near No. 1 in the US during the Xbox 360 era in the early 2010s, by the prior and current console generation defined by the Xbox Series X and PS5, Sony's PlayStation is now the global market leader, accounting for nearly half of all sales, with Nintendo's Switch at 27% and Xbox at 23%.
What happened to XboxIn a video titled "How Things Got So Bad at Xbox," Bloomberg reporter Jason Schreier argues that Xbox's current turmoil is the result of inconsistent strategy, shifting priorities and a late-stage push for profitability after massive spending.
Schreier traces Xbox's decline from a console-first business to a sprawling, internally conflicted organization with hardware, software, subscriptions and studios pulling in different directions, not to mention expensive acquisitions. Microsoft's $68.7 billion purchase of Activision Blizzard in October 2023 -- the largest acquisition ever in the video game industry -- was followed by repeated Xbox layoffs and the cancellation of games.
In a Bloomberg Live interview last month, Sharma said that Xbox had grown too broad and complex, and was looking to reset the business by focusing on core priorities and long-term sustainability. Sharma said the company needed to look at how it's investing, how it's prioritizing change and how it's operating to return to growth.
In what appeared to be an effort to reassure investors and partners, she called Activision and other studios "incredible assets" and said Xbox will continue to invest in them.
Yet analysts see the sudden cuts and jettisoning of well-known studios as an attack on the Xbox institution that it will be difficult to recover from -- if it does at all.
With this move, Microsoft is slashing and burning 25 years of creativity, infrastructure and goodwill, said Amanda Farough and Mike Futter, game developers and industry analysts who host the Virtual Economy podcast. The message from the top is clear: Do not buy an Xbox.
Farough said that the rapid deaccessioning of Double Fine, Compulsion, and Undead Labs, and the threat to Arkane Lyon, show that current Xbox executives still don't understand the industry.
Divesting from studios and enacting layoffs makes it appear that Microsoft is thinning out to become a more attractive acquisition target, Futter said. Whatever the reason, the result is more instability in one of the worst years within the games industry, with 8,300 jobs lost at the halfway point of the year -- already almost twice as much as in the entirety of 2025, according to the layoff-tracking website GamingLayoffs.com.
"No one is safe," Futter said. "No matter how much you can contribute, how creative you are, how successful your games are, nothing matters more to this leadership than cutting until there's nothing left but the most salable of studios making the next sequel in a household name franchise."
Pundits and media critics have been equally skeptical that Xbox can right the ship. Video game reviewer Max Shockley, whose DreamcastGuy YouTube channel has more than 250,000 subscribers, says Xbox has given up on being a competitive platform. "Games are already releasing half-baked, buggy or downright busted. Less employees won't lead to a more polished product," he told CNET.
Shockley said it will be very difficult for Xbox to develop Project Helix, the codename for its next-gen console that is being conceived as a hybrid to play both Xbox titles and PC games.
"Going into a new console generation with the lowest level of studios and literal billions poured down the drain for zero growth is a complete nonstarter. Their next-generation console, I think, will either not come out or will be fully built by someone else," Shockley said.
The end of the roadFans haven't been happy about the news, either. In a Reddit thread about the restructuring, Xbox fans mostly mocked the company's repeated cycle of buying and cutting studios, framing it as corporate hypocrisy or a "circle of life" for large tech companies.
While some commenters acknowledged that the move could make business sense, others expressed intense disappointment with Microsoft's and Xbox's leadership.
CNET managing editor David Lumb said that even if the layoffs please shareholders, the decision damages trust with gamers and leaves developers paying the price: "It's ghoulish for Xbox CEO Asha Sharma to aspire for a billion daily Xbox players while derailing the lives of thousands of developers making the entertainment to satisfy such aims," Lumb said.
Even if Xbox survives in the long term, this won't "encourage faith in a teetering platform that sprinted to acquire and then relinquished talent-filled studios."
Shockley considers Xbox's future more dire, calling it the "end of the road" and noting that budget cuts, layoffs and studio closures never inspire magically profitable results. "Xbox tried to buy its way to the top of the industry, but the wings of Icarus melted before it reached the heights it needed," Shockley said.
What's nextFor gamers looking forward to the release of new titles, Sharma said there are deals in place for the new owners of Ninja Theory to release its next game, Senua, and for Undead Labs to keep developing State of Decay 3.
Sharma said there will also be reductions and changes in other Xbox units, including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang and Xbox Game Studios. She said all first-party, publicly announced games or projects are still happening.
A month ago, on June 7, Xbox touted Senua -- the third title in the Hellblade series -- at its Xbox Game Showcase. Longtime video game reporter Stephen Totilo of Game File wrote that, according to a source, Xbox "had already planned to sunset or split with the studio" before announcing Senua.
Ahead of Microsoft Corporation's Q4 results, shares are underperforming, with monthly losses of about 6.5%. The stock is also sitting near the bottom end of its 52-week range. The losses come as many investors continue to question whether the company's AI investments can produce the desired results. MSFT has also announced that it will cut over 3,000 jobs in its Xbox division.
Bragar Eagel & Squire, P.C. Litigation Partners Brandon Walker and Melissa Fortunato Encourage Investors Who Suffered Losses In Microsoft (MSFT) To Contact Them Directly To Discuss Their Options
If you purchased or acquired Microsoft common stock between May 1, 2025 and January 28, 2026 and would like to discuss your legal rights, contact Bragar Eagel & Squire partner Brandon Walker or Melissa Fortunato by email at [email protected] or by telephone at (212) 355-4648
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NEW YORK, July 06, 2026 (GLOBE NEWSWIRE) --
What’s Happening:
Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Microsoft Corporation (“Microsoft” or the “Company”) (NASDAQ:MSFT) in the United States District Court for the Western District of Washington on behalf of all persons and entities who purchased or otherwise acquired Microsoft common stock between May 1, 2025 and January 28, 2026, both dates inclusive (the “Class Period”). Investors have until August 11, 2026 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Allegation Details:
According to the lawsuit, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (1) Microsoft's Copilot family of products had experienced significant brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems; (2) Microsoft's flagship proprietary AI model ranked well below competitors on a number of benchmark tests; (3) Microsoft needed to increase by billions of dollars its capital expenditures and divert graphics processing unit ("GPU") and central processing unit ("CPU") capacity away from fulfilling demand for its profitable Azure services in order to improve the competitive positioning of its critical Copilot family of products and increase its AI-related research and development ("R&D"); and (4) as a result, Microsoft had failed to convert a significant percentage of its commercial Microsoft 365 users to paid Copilot subscriptions and Microsoft's Copilot offerings had lost market share to rival products, a trend that was increasing. When the true details entered the market, the lawsuit claims that investors suffered damages.
Next Steps:
If you purchased or otherwise acquired Microsoft shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at [email protected], telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, South Carolina, and California. The firm represents individual and institutional investors in securities, derivative, and commercial litigation as well as individuals in consumer protection and data privacy litigation. The firm has a nationwide practice and routinely handles cases in both federal and state courts. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
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Microsoft's shares were falling on Monday even as the company announced its latest round of job cuts, as investors likely refused to look past the company's high AI investments.
A price target cut by Wolfe Research on Monday, citing higher memory prices, is likely to have also weighed on the stock, even though it maintained an Outperform rating on MSFT.
Shares of Microsoft MSFT fell about 1% on Monday afternoon after suffering a higher decline earlier in the day following the software giant's announcement that it would eliminate roughly 4,800 jobs, or about 2.1% of its global workforce, while restructuring its Xbox gaming business and continuing to ramp up spending on AI infrastructure.
The decline contrasted with the market's typical response to large-scale technology layoffs, which in recent years have often been viewed as signs of improving cost discipline and stronger profitability.
Microsoft's shares have fallen 18% so far this year, making the company a laggard among the Magnificent 7 stocks as it contends with investor pushback on the front of heavy AI capex spending while also being weighed down by their fears of AI disrupting software.
Microsoft said the restructuring would include significant changes to its gaming division, with plans to divest as many as five Xbox studios after years of heavy investment in the business.
The gaming overhaul will account for about 3,200 job cuts, including 1,600 layoffs announced on Monday.
The move comes as Microsoft increasingly prioritizes investments in artificial intelligence, which executives believe offer stronger long-term returns than its slower-growing gaming operations.
DA Davidson's Head of Technology Research Gil Luria said Microsoft's capital allocation reflects where management sees the greatest opportunity.
"AI drives more infrastructure software sales, then it drives more Office sales with Copilot. They have a much better place to invest right now. The gaming business doesn’t have much growth, so they might as well cut costs there in order to fund AI investment," he told CNBC.
Investors remain focused on AI spendingUnlike previous restructuring announcements across the technology sector, Microsoft's layoffs failed to reassure investors.
Amazon shares rose, albeit modestly, after the company announced plans to eliminate 16,000 roles earlier this year, while Meta's stock also gained following reports in March that it intended to cut more than 20% of its workforce.
Microsoft's shares, however, moved lower, suggesting investors remain more concerned about the company's rising AI investment bill than potential savings from workforce reductions.
AJ Bell investment director Danni Hewson said the market is still waiting for tangible evidence that Microsoft's enormous AI spending is translating into stronger financial performance.
"Markets are waiting to see solid financial evidence that all that capex is paying off and that the faith in AI as a growth supercharger has been warranted."
She added that investors may also have already priced in the restructuring after reports emerged last week that Microsoft was preparing another round of layoffs.
Parth Talsania, chief executive of Equisights Research, said the announcement was unlikely to provide a fresh catalyst for the stock.
"That (targeted cuts) makes the announcement read more like portfolio reallocation and operating discipline than a fresh catalyst for the stock."
"In the near term, the market is likely to reward Microsoft less for headcount reductions and more for evidence that AI monetization is scaling faster than AI-related costs," she said.
Adding to investor concerns, Wolfe Research reduced its price target on Microsoft to $525 from $570 while maintaining its Outperform rating.
Analyst Alex Zukin cited sharply higher memory prices following Micron Technology's latest earnings report, prompting the firm to raise its estimate for Microsoft's fiscal 2027 capital expenditure to $270 billion from $230 billion.
The higher investment outlook led Wolfe to project fiscal 2027 free cash flow of negative $17.4 billion, compared with its earlier estimate of positive $14.7 billion and well below the market consensus of roughly $31 billion.
The brokerage also lowered its fiscal 2027 gross margin forecast to 63.1% from 64%, compared with the consensus estimate of 66.6%, while trimming its earnings-per-share estimate by 1% to $19.02.
Despite the revisions, Wolfe remained optimistic about Microsoft's long-term AI strategy.
The firm said it "remains long-term bullish on MSFT's full-stack monetization approach to AI with Azure growth acceleration and rising Agent monetization potential."
It expects Azure revenue growth of 41% in fiscal 2027 and 40% in fiscal 2028, ahead of Wall Street expectations.
Zukin also pointed to Microsoft's disclosure of $11.5 billion in restricted investments linked to supplier agreements, which Wolfe believes "could reflect the company locking in a portion of component costs tied to memory," potentially reducing future pricing pressure.
Luria argued that investors have become overly pessimistic about Microsoft's outlook by embracing two conflicting narratives simultaneously — that AI will weaken software demand while the company is overspending on AI infrastructure.
He rejected both views.
"The narrative on Microsoft has turned very negative, but that's an opportunity, because when they report in three weeks, they're going to report accelerating Azure growth and they're going to report capex growth that's at a lower rate than that."
Microsoft is scheduled to report fourth-quarter earnings on July 29.
According to Fiscal.ai data, Wall Street expects revenue to rise 15% year over year to $87.66 billion, while earnings per share are projected to increase to $4.24 from $3.65 a year earlier.
For investors, the results are likely to determine whether Microsoft's costly AI strategy is beginning to deliver the returns the market has been waiting for.
Microsoft (NASDAQ:MSFT | MSFT Price Prediction) looks mispriced, and the discomfort is the whole point. The company is cutting roughly 4,800 jobs, about 2.1% of its workforce, while telling investors it will spend roughly $190 billion on capex in calendar 2026 to feed AI and Azure.
Microsoft is the closest thing the S&P 500 has to a pure AI infrastructure operator, with three legs (Productivity, Intelligent Cloud, and a fading More Personal Computing segment) all bent toward the same agentic-computing story. Shares are down 22% over the past year and 18% year to date, even as Azure and other cloud services grew 40% in constant currency last quarter. The market is repricing the payoff while demand keeps compounding.
Why the reset makes MSFT interesting again The bull case starts with a number Satya Nadella dropped on the last call. “Our AI business surpassed $37 billion ARR, up 123%.” Commercial remaining performance obligations, essentially contracted future revenue, hit $627 billion, up 99% year over year. That is not a demand problem.
Valuation has become reasonable. Trailing P/E is 23x and forward P/E is 20x, on a business with 34% return on equity and 46.3% operating margins. Retail has noticed. The top r/stocks post of the past two weeks argued “Microsoft is now cheaper than the April 2025 Tariff crash, yet TTM EPS is up 30%”, drawing more than 1,400 upvotes.
Why the capex bill still terrifies people Q3 capex was $30.88 billion, up 84.39% year over year, and Amy Hood guided Q4 to over $40 billion. Free cash flow yield has compressed to 2.47%, which is skinny for a company financing GPUs with two-thirds of that spend going into short-lived assets. Industry chatter puts GPU utilization at some hyperscalers as low as 33%, maybe up to 50%, hobbled by connectivity bottlenecks.
Prediction markets have absorbed the skepticism. Polymarket is currently pricing a 69.5% probability that Anthropic and OpenAI combined will be worth more than Microsoft by year-end 2026. Insiders are net sellers across 33 recent transactions. The layoff, framed by Hood as building “high-performing teams that operate with pace and agility”, reads to bears as margin defense against a capex wave that has not paid for itself yet.
The case for sitting on your hands Polymarket’s modal outcome for July close is $405, at 67% probability, with the week ending clustered around $380 to $390. That is roughly here. The near-term signal is consolidation.
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What tips the verdict is Azure monetization pace. If Q4 Azure lands inside guidance of 39% to 40% growth and AI margins hold, patience gets expensive fast. If capex creeps toward $200 billion without corresponding revenue conversion, waiting was correct.
What the numbers actually say Microsoft trades at $386 against a Wall Street average target of $561.11, implying substantial upside if analysts are right. Of the analysts covering it, 53 rate it Buy, 3 Hold, and none Sell. The stock is down 19.85% over the past year while the S&P 500 has stayed roughly flat to modestly higher over the same window, based on the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) moving from $718.66 at the April earnings filing to $750.82 currently. Microsoft is the laggard among the megacaps.
Right now, the setup looks constructive. You are paying 20 times forward earnings for a business growing revenue 18.3% year over year, with a $627 billion contracted backlog and an AI segment compounding at triple digits. The capex fear is real, but Hood was explicit that AI margins “were actually better and have remained better” than the equivalent stage of the cloud transition. The layoffs read as operating leverage getting engineered while the infrastructure gets built.
Can MSFT stock keep going up? The specific path to appreciation is Azure printing another 39% to 40% quarter in late July, capex coming in near the $190 billion guide rather than blowing past it, and the AI ARR line moving from $37 billion toward $50 billion over the next two quarters.
What invalidates the thesis is any of those three slipping meaningfully, particularly Azure growth breaking below 35% while capex continues climbing. Watch Q4 gross margin in Microsoft Cloud, which slipped to 66% last quarter. Another leg down there and the payoff timeline stretches.
The uncomfortable trade is the one where the fundamentals are already working and the stock has not caught up yet, and at $386, that describes Microsoft.
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Microsoft Corp.'s Xbox plans to eliminate 3,200 jobs, or around 20% of its staff over the next year, as part of a massive reorganization to spur growth in the struggling gaming division. Xbox will also divest four of its video-game development studios and is beginning the process to part ways with a fifth.
Microsoft can be the “orchestration layer” for enterprises using artificial-intelligence models, analysts say. (Martin LELIEVRE / AFP via Getty Images)
The artificial-intelligence boom has also caused a surge in new buzzwords for investors to learn, from “inference” to “agents” to “edge.” Next up on the list: “Orchestration.”
Microsoft said on Monday it was eliminating about 4,800 jobs – roughly 2% of its global workforce – in a cost-cutting move that will deliver a sweeping restructuring of its struggling Xbox gaming division.
The cuts include the deepest overhaul in Xbox’s history, with approximately 3,200 gaming jobs to be shed over the coming fiscal year, four game studios being spun off or sold, and a fifth entering a review process that could lead to closure, the company said.
The announcement is the latest in a string of mass layoffs by the tech company as it spends large sums of money to stay in the artificial intelligence race, with companies investing tens of billions of dollars in AI-ready datacenters and computing power.
“Our business is changing because the world around it is changing,” Amy Coleman, Microsoft’s executive vice-president and chief people officer, wrote in a memo to all employees.
“Companies don’t get to choose whether their industry changes; they only get to choose whether they change with it.”
Coleman said the layoffs fell mostly within Microsoft’s commercial business and Xbox.
She said the eliminated roles were “not being replaced by AI”, but acknowledged that automation was reshaping how work is done across the company.
On the commercial side, she said the cuts would build on Microsoft’s $2.5bn push, announced last week, to embed 6,000 engineers inside enterprise clients to accelerate AI adoption by often reluctant customers.
At Xbox, CEO Asha Sharma told employees in a separate memo that 1,600 positions were being cut immediately, with the rest to follow through fiscal year 2027.
Xbox has been through successive rounds of cuts since Microsoft’s $68.7bn acquisition of Activision Blizzard closed in 2024 after a long review process by regulators over competition concerns.
Sharma described Xbox’s business as “not healthy”, with profit margins “3-10 times lower” than rivals.
She succeeded the longtime Xbox chief, Phil Spencer, who retired in February, and has pledged to return the division to growth by 2027.
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“History is full of companies that mistake longevity for inevitability,” she wrote. “We will not be one of them.”
Four studios will leave Xbox as part of the restructuring.
Compulsion Games and Double Fine Productions will become independent, retaining their intellectual property and game catalogs.
Ninja Theory and Undead Labs have entered terms to join new owners with funding to continue their current projects.
In France, Arkane’s management is beginning a required consultation with its works council to review what Sharma called “potential strategic options” – a process that could result in further closures or a sale.
Microsoft is axing 4,800 employees, most of them from its Xbox division, as it and the rest of the tech industry seek to adapt to the AI era.
The cuts come as the software giant has heavily invested in artificial intelligence after years of pouring cash into gaming.
“Our business is changing because the world around it is changing. The way technology is built, deployed, and used is transforming faster than at any point in my time here,” Amy Coleman, Microsoft’s chief people officer, wrote in a Monday memo to employees.
Xbox Chief Executive Asha Sharma said the sagging video game maker must shed workers amid an overhaul. Bloomberg via Getty Images The layoffs included 1,600 Xbox employees who were immediately let go, with another 1,600 set to be axed over the rest of Microsoft’s fiscal year, according to Xbox Chief Executive Asha Sharma.
“Our business today is not healthy,” she wrote employees, going on to list challenges like slow growth.
“We are operating at margins that are 3-10x lower than comparable platform and publishing businesses,” Sharma added. “We must reset Xbox.”
Microsoft – which became a dominant force in the video game arena with the landmark launch of the Xbox in 2001 – is also selling or spinning off four game development studios and weighing strategic options for a fifth, according to Sharma.
The cuts account for 2.1% of Microsoft’s global workforce — and one-fifth of Xbox staffers.
AI has been blamed for layoffs throughout the tech sector, which saw its worst start to the year in terms of employment since 2023. The first three months of 2026 brought 52,050 tech layoffs — a 40% jump from the same period last year, according to executive coaching firm Challenger, Gray & Christmas – with AI increasingly being blamed for the cuts.
The soon-to-be axed Microsoft employees won’t actually be replaced by AI, Coleman said.
Microsoft became a dominant force in the video game business with the landmark launch of the Xbox in 2001. “At the same time, what is true is that AI is changing how work gets done. Some of the tasks we do every day can now be automated, and that means we all need to keep learning, keep building new skills, and keep adapting as the work evolves,” she said.
Microsoft stock was down about 1.5% as of midday Monday.
Microsoft – along with rivals Sony and Nintendo – has jacked up prices for its Xbox consoles amid a global memory chip shortage caused by seemingly bottomless demand for powerful chips from the AI sector.
The video game industry has faced waves of layoffs over the past two years after companies including Microsoft ramped up hiring during the COVID pandemic. That growth slowed once pandemic restrictions ended.
Microsoft bought game makers such as Activision Blizzard to strengthen Game Pass, its Netflix-style subscription service. Sharma acknowledged in the memo that Game Pass “did not grow at the pace we expected.”
Xbox revenue fell 5% in the quarter ended in March compared with a year earlier. The division’s profit margin for the fiscal year ended in June was 3%, down from the previous year.
Satya Nadella’s Microsoft has poured ever-more resources into AI. dpa/picture alliance via Getty Images Microsoft CEO Satya Nadella tapped Sharma, the former chief operating officer of Instacart, to helm Xbox in February despite her lack of experience in the video game industry. Since taking over, she has hustled to reshape the business.
Sharma is reducing the number of games Microsoft publishes while putting more resources behind its biggest franchises, including Minecraft, Candy Crush and Fallout. She also lowered the price of Game Pass after the service lost subscribers following a price increase last year, and stopped adding new “Call of Duty” titles to the subscription service, requiring players to purchase them separately.
Beyond gaming hardware and subscriptions, Xbox operates Microsoft’s digital game store for Windows PCs. As the company scales back its own game development, Sharma is working to make Microsoft a more attractive distribution platform for the growing number of independent game developers.
Not a day goes by that the market doesn't receive a wrinkle in the artificial intelligence (AI) story. It was reported that Meta Platforms (META +3.02%) plans to sell its excess computing capacity, in effect building its own cloud segment. This would pit its new venture, called Meta Compute, against dominant platforms from Amazon, Microsoft, and Alphabet.
The social media stock surged 9% to $612.91 on July 1. Shares then dipped 5% on July 2. Should investors view this strategic pivot as a bearish or bullish signal?
Image source: The Motley Fool.
Did Meta overbuild? Meta's capital expenditures (capex) increased 84% year over year in 2025 to $72.2 billion. The figure is projected to total between $125 billion and $145 billion this year. These are enormous figures that reveal how bullish founder and CEO Mark Zuckerberg is on AI's potential.
But the dollar amounts demonstrate a changing financial structure. Meta has now become a capital-intensive business, and the market appears worried. Shares are down 26% since hitting an all-time high in August last year.
The concerns are valid, as they rest on the company's ability to earn a meaningful return on this unprecedented level of spending. Zuckerberg previously hinted at the company's options if it ended up overbuilding capacity.
The bearish view is obvious here. It looks like Meta is admitting that it invested too much money in AI-related data centers and infrastructure. It's already figured out that it can't monetize this capex through its internal operations. Maybe this is an early indication that the AI boom is on shaky ground.
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Demand is ahead of supply Entering the cloud computing market seems like a rational move. However, Meta will compete squarely with Amazon Web Services, Azure, and Google Cloud, which have multi-year headstarts, comprehensive product and service offerings, and proven track records.
An upbeat view is that the management team realizes that selling AI compute capacity to outside customers generates a much better return, even with competition from established players. This is particularly the case right now, since demand for these resources far outpaces supply. Alphabet paying Space Exploration Technologies $920 million per month for AI compute capacity is a clear sign of how constrained the industry is.
The good news is that Meta's core operations are thriving. Advertising revenue jumped 33% year over year in the first quarter (ended March 31), driven by strong gains in ad impressions and pricing. This is a foundation that shareholders can depend on.
I believe investors should view this move in a positive light. Meta Compute is a way to produce revenue sooner rather than later, which will help to ease lingering fears about the huge AI capex cycle.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
LOS ANGELES, July 06, 2026 (GLOBE NEWSWIRE) -- Glancy Prongay Wolke & Rotter LLP reminds investors of the upcoming August 11, 2026 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired Microsoft Corporation (“Microsoft” or the “Company”) (NASDAQ: MSFT) common stock between May 1, 2025 and January 28, 2026, inclusive (the “Class Period”).
IF YOU SUFFERED A LOSS ON YOUR MICROSOFT INVESTMENTS, CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS UNDER THE FEDERAL SECURITIES LAWS.
What Happened?
On January 28, 2026, Microsoft announced disappointing results for its second quarter of fiscal 2026, revealing that growth of its cloud computing platform, Azure, had slowed suddenly and fallen below analyst expectations due primarily to computational capacity constraints, as the Company had diverted central processing unit and graphics processing unit capacity to applications for its generative AI chatbot, Copilot, and AI-related research and development. The Company also revealed that its capital expenditures had increased to $37.5 billion during the quarter, causing the Company’s capital expenditures for the first six months of fiscal 2026 to expand to $72.4 billion compared to $88.2 billion for the entirety of fiscal 2025, largely due to AI-related research and development and Copilot development and capacity buildout costs. Additionally, Microsoft disclosed that the amount of paying users of Copilot was well below analyst estimates.
On this news, Microsoft’s stock price fell $48.13, or 9.99%, to close at $433.50 per share on January 29, 2026, thereby injuring investors.
What Is The Lawsuit About?
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Microsoft’s Copilot family of products had experienced significant brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems; (2) that Microsoft’s flagship proprietary AI model ranked well below competitors on a number of benchmark tests; (3) that Microsoft needed to increase by billions of dollars its capital expenditures and divert GPU and CPU capacity away from fulfilling demand for its profitable Azure services in order to improve the competitive positioning of its critical Copilot family of products and increase its AI-related R&D; (4) that, as a result of the foregoing, Microsoft had failed to convert a significant percentage of its commercial Microsoft 365 users to paid Copilot subscriptions and the Company’s Copilot offerings had lost market share to rival products, a trend that was increasing; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
If you purchased or otherwise acquired Microsoft common stock during the Class Period, you may move the Court no later than August 11, 2026 to request appointment as lead plaintiff in this putative class action lawsuit.
Contact Us To Participate or Learn More:
If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
Charles Linehan, Esq.,
Glancy Prongay Wolke & Rotter LLP,
1925 Century Park East, Suite 2100,
Los Angeles California 90067
Email: [email protected]
Telephone: 310-201-9150,
Toll-Free: 888-773-9224
Visit our website at www.glancylaw.com.
Follow us for updates on LinkedIn, Twitter, or Facebook.
If you inquire by email, please include your mailing address, telephone number and number of shares purchased.
To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contact Us:
Glancy Prongay Wolke & Rotter LLP,
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Charles Linehan
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Visit our website at: www.glancylaw.com.
Microsoft announced on Monday it is laying off 4,800 employees, or 2.1% of its workforce—with more to come—as part of a massive cost-cutting restructuring effort. The layoffs include major cuts from its Xbox division.
In a memo to staffers, Xbox CEO Asha Sharma said Microsoft was “resetting Xbox” and would be cutting a total of 3,200 employees, or 20% of that division, throughout fiscal 2027—including spinning off four gaming studios. Compulsion Games and Double Fine Productions will become independent studios, while Ninja Theory and Undead Labs will be spun off.
This amounts to eliminating 1,600 roles now and another 1,600 in the coming year, as the company focuses on artificial intelligence (AI) and away from its lagging gaming sector.
This is just the latest round of layoffs for the tech giant, coming a year after the company eliminated 9,000 jobs.
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“Our business today is not healthy,” Sharma said. “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.”
So, what happened?
According to Sharma, “[Microsoft’s] core business weakened, and [they] added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history.”
It's been a challenging year for some of the world's leading tech stocks. While some stocks have thrived, namely those that are involved in selling memory and storage products, many others have struggled.
A couple of tech giants within the "Magnificent Seven" that have been doing particularly poorly are Microsoft (MSFT 1.18%) and Meta Platforms (META +3.02%). They're both down double digits as investors have been pivoting to other names in tech instead. But with both of these businesses still generating terrific results recently, they may still have a lot to offer investors. Which one is the better buy for the second half?
Image source: Getty Images.
As of the end of June, Microsoft's stock was down an incredible 23%, making it the worst-performing stock in the Magnificent Seven. That's bad for current shareholders, but for people looking to buy the stock, it could make for an intriguing opportunity.
That's because Microsoft remains a top tech company. Its Windows operating system and Office software are staples in businesses all over the world. Artificial intelligence (AI) and chatbots aren't likely to make them obsolete. In fact, AI should enhance its products and make them more useful. But amid the panic due to AI fears, the market has dumped Microsoft along with many other software stocks.
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The company's AI business grew at a rate of 123% in its most recent quarter, and the overall business generated 18% growth. Those are terrific numbers, with many of Microsoft's products and services delivering double-digit growth. For a top tech stock with a varied business model, Microsoft has a lot of upside given its attractive valuation; it trades at 23 times its trailing earnings, which is less than the S&P 500 average of 25.
The case for Meta Platforms Social media giant Meta Platforms has been investing heavily in AI, but that hasn't been enough to stop it from going on a sizable downturn this year. At the halfway point of the year, it was down 15%.
Meta has many top social media applications in its portfolio, including Facebook and Instagram. And the company is looking to AI to drive even more opportunities for its business, with Meta AI now being available in its apps. The company has rolled out paid AI plans for its applications, which may drive more revenue growth for its already strong business. With 33% revenue growth during the first three months of the year, Meta is doing well as its apps continue to be attractive options for marketers and advertisers to reach their target markets.
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The company's strong profits enable it to spend heavily on the metaverse and AI, potentially unlocking more growth in the long run. At a price-to-earnings multiple of 21, the stock is an even cheaper option than Microsoft.
Which stock looks better right now? Although it's a bit more expensive, Microsoft's stock may generate better returns for investors in the long run. Its software is crucial for businesses, and that isn't likely to change anytime soon. AI may prove to be more of an opportunity than a threat to its operations. Meta, meanwhile, faces a bit more uncertainty given the increased spotlight on social media and the harms it poses to children. Its tendency to spend aggressively as it chases the latest trends (as is the case now with AI) is also why I'd tread a bit more cautiously with the stock.
Microsoft looks to be the safer, more reliable investment to consider when looking at the long run. It may just be a matter of when it starts to rally, but this is definitely a stock with a lot of potential upside given its reduced valuation.
Microsoft Corp. (NASDAQ:MSFT) is starting its new fiscal year with a substantial personnel cut.
The tech behemoth announced Monday it will cut about 4,800 jobs. That’s around 2.1% of its worldwide staff. According to Benzinga’s findings, most of the cutbacks are in the company’s sales, consultancy, and Xbox gaming units.
Microsoft Layoffs Happen Again: Why? So why is the most profitable tech giant firing thousands of workers?
The short answer is the jaw-dropping price tag of artificial intelligence. Microsoft is investing record amounts into AI infrastructure. The corporation is creating enormous data centers, buying high-end CPUs, and expanding cloud capacity.
These large expenditures, therefore, are feeding major anxieties on Wall Street. Investors are worried that heavy expenditure on AI will squeeze profit margins badly.
“Decisions like these are never easy, and you have my commitment that we are always investigating how to reduce the need for job eliminations,” Amy Coleman, EVP and Chief People Officer at Microsoft, explained.
There is also a growing fear that AI might disrupt existing enterprise software models. Microsoft is trying to cut back on non-core corporate employment to offset these capital costs and protect its bottom line.
However, this is not the first time Microsoft has laid off people this year. The company’s first significant workforce reduction of 2026 began on April 23.
During that period, Microsoft introduced its inaugural voluntary retirement buyout program, offering early-retirement incentives to about 8,750 eligible U.S. employees.
Wall Street Reacts: No More Rally for MSFT? Investors initially liked the significant cost cuts. Microsoft shares were up more than 3% when the first rumors of the layoffs arose, breaking a severe multi-week downward trend.
The stock finished last week at $390.49, bouncing back from a new 52-week low of $349.20.
But the IT giant still faces an uphill struggle on the charts. The restructure follows a difficult month for stockholders. Microsoft shares dropped nearly 19% over the last six months.
At the time of writing, the Microsoft layoffs have forced the MSFT stock down to $383.48.
In June, the share price declined by 10.39%. As a result, some market watchers called it the worst single-month performance by the corporation since the dot-com era.
Xbox Business Goes RedBesides that, Microsoft’s gaming industry has faced severe difficulties in addition to AI pressures.
About 1,600 of the initial job cutbacks are with the Xbox division. It comes after years of aggressive purchases, including the $69 billion acquisition of Activision Blizzard.
But, despite all these significant efforts, Xbox has yet to find its foothold. Internal memos show that hardware sales fell 33% last quarter.
In an email to the affected employees, Xbox CEO Asha Sharma told staff that the business couldn’t continue on its present course, noting that the business is not currently healthy.
However, she noted that Xbox will prioritize growth and could be open to hiring again sometime in the future.
On the weekly chart, the Microsoft layoffs seem to have affected the stock structure. As shown below, MSFT is forming a potential head-and-shoulders pattern, with the right shoulder near $450-$455 after the rally failed to set a new high.
This rejection suggests sellers remain in control. Furthermore, the stock is now trading around the 50% Fibonacci retracement at $384.11, a key support level.
If this level fails, Microsoft could slide toward the 38.2% Fibonacci retracement at $343.94, where stronger demand may emerge.
However, a weekly close back above $450 would invalidate the bearish setup and improve the outlook.
Meanwhile, the MACD remains below both the zero line and the signal line, indicating that bearish momentum is still stronger than bullish momentum, even as selling pressure shows signs of easing.
Microsoft Layoffs: The Metrics Investors Need to WatchMicrosoft does budget resets on July 1, the start of its new fiscal year, regularly. A prior voluntary buyout scheme helped soften this year’s forced departures, leading to over a third of the 8,750 U.S. employees eligible for early retirement.
However, the fact that 4,800 jobs are still being eliminated speaks to a deeper issue.
Now the big question for investors is how these cuts would protect Microsoft’s bottom line. The company is currently treading a fine line, sustaining outstanding operating margins (46.3% in Q3) while absorbing a staggering $190 billion annual capital expenditure driven by AI technology.
Management has the financial flexibility to support this infrastructure boom by cutting non-core areas such as legacy sales and underperforming locations within Xbox.
Going forward, investors will need to watch key metrics in the upcoming Q4 earnings release to see if these aggressive internal efficiencies can help gross margins hold steady against rising data center costs.
It might also be important to see if Azure can continue to grow at 39% to 40% to justify the heavy CapEx outlays.
Ultimately, these layoffs show that Microsoft is ready to sacrifice legacy personnel to win the next generation of enterprise AI. Time will tell if the company will win.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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Microsoft is eliminating 4,800 positions, representing approximately 2.1% of its global workforce, as the software giant navigates a broader shift toward artificial intelligence (AI) and seeks to stabilize underperforming hardware and gaming segments, CNBC reported Monday (July 6).
The restructuring hits the company’s Xbox division particularly hard. According to an internal memo from Xbox CEO Asha Sharma, the unit will shed 3,200 roles through fiscal year 2027. Half of those reductions—1,600 positions—were finalized Monday, accounting for roughly one-fifth of the division’s total staff. Sharma characterized the multi-year downsizing as a difficult but necessary step, stating that it is “not possible to make all the necessary changes in a single day.”
As part of the consolidation, Microsoft is spinning off several game development studios. Compulsion Games and Double Fine Productions, both acquired in the 2010s, will return to independent status. Ninja Theory and Undead Labs have reportedly entered terms to join new ownership, while Microsoft is exploring “strategic options” for France-based Arkane Studios.
The workforce reductions come amid a period of market volatility for Microsoft. The company has been the worst-performing megacap tech stock in 2026, declining 19% as of Friday’s (July 3) close. While cloud services and LinkedIn have shown growth, the company is grappling with shrinking revenue in Windows licenses, Surface devices and Xbox. Furthermore, investors remain concerned that generative AI could displace traditional enterprise software before Microsoft’s own AI services become major contributors to the bottom line.
Amy Coleman, Microsoft’s chief people officer, noted in the memo that while AI is not directly replacing laid-off workers, it is fundamentally “changing how work gets done” through the automation of daily tasks. To mitigate the impact of the cuts, Microsoft in April utilized a voluntary retirement program for U.S. employees at the senior director level and below, an offer accepted by more than one-third of those eligible, CNBC reported.
These layoffs reflect a failure of the subscription-focused model Microsoft had previously employed for its gaming division under former CEO Phil Spencer. In 2023, Xbox announced a $1 billion investment in Game Pass, its subscription service where users could enjoy unlimited games, including new releases, for a flat monthly fee. Although the program saw initial success, price hikes over the years led to millions of users unsubscribing.
Americké akciové indexy se po prodlouženém víkendu, kdy ještě doznívají sváteční konfety, pohybují v kladném teritoriu v čele s technologickým Nasdaqem, který přidává bezmála 1,3 %, širší index S&P500 pak posiluje o 0,7 %. Kosmetický zisk 0,05 % si připisuje též tradiční index Dow Jones.
K růstu se po korekci v minulém týdnu vrátily polovodiče. Referenční Philadelphia SE Semiconductor index zpevňuje téměř o 4 % a sektor informačních technologií jednoznačně dominuje dnešnímu odvětvovému růstu v rámci S&P500 se ziskem 2 %. Jim sekundují komunikační služby (+0,9 %). Naopak sektor zbytných statků, zdravotnictví a utilit vykazuje více než 1% ztrátu.
Po sérii nových historických maxim z prvního pololetí přijde již brzy další test robustnosti trhu v podobě výsledkové sezony. Zejména volatilní polovodičový sektor v poslední době ukazuje, že prostor pro zklamání je omezený. Reportovací období pomyslně odstartují příští úterý přední americké banky.
Smíšeným vývojem dnes prochází dluhopisy. Zatímco kratší maturity lehce zpevňují, delší splatnosti naopak mírně ztrácí. Výnos 10letého vládního bondu se drží těsně nad hladinou 4,48 %. Drahé kovy vykazují ztráty. Zlato odepisuje 0,6 % na 4152 USD/oz, stříbro oslabuje o 1 % na 61,8 USD/oz.
V energetickém sektoru se nedaří ropě, která se obchoduje slabší o 0,6 % na 68,3 USD/barel, zemní plyn naopak přidává 0,9 % na 3,23 USD/mmbtu.
Na korporátní úrovni S&P500 konstituentů si nejlepší výsledek připisují akcie výrobce procesorů a AI akcelerátorů, spol. AMD (AMD +7,9 %) po zvýšeném cíli od Goldman Sachs na 640 z předchozích 450 USD při trvajícím poptávkovém momentu v oblasti AI. Nejhorší výsledek pak registruje prodejce náhradních autodílů, spol. O’Reilly (ORLY -7,2 %) po zprávách o akvizičním zájmu převzít konkurenta NAPA Auto Parts, divize spol. Genuine Parts (GPC), při hotovostní nabídce za více než 10 mld. USD. Nedaří se ani dalšímu z prodejců auto komponent, spol. Autozone (AZO -6,1 %).
Z dalších zajímavých korporátních zpráv pak doplňme oznámení Microsoftu (MSFT -1,2 %) o propuštění 4800 zaměstnanců (2,1 % pracovníků). V polovodičovém segmentu potěšil investory Broadcom (AVGO +4,2 %) po prodloužení obchodní spolupráce s Applem (AAPL) do roku 2031.
Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Informační technologie +1,9 % Zbytná spotřeba -1,5 % Sektor komunikací +1 % Zdravotní péče -1,3 % Nezbytná spotřeba +0,8 % Utility -1,2 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Advanced Micro Devices (AMD) +7,9 % O'Reilly Automotive (ORLY) -7,2 % Arista Networks (ANET) +7,7 % AutoZone (AZO) -6,1 % VERTIV HLD A O (VRT) +6,7 % Constellation Brands (STZ) -5,7 % Tesla (TSLA) +6,3 % Tractor Supply (TSCO) -4,9 % QUALCOMM (QCOM) +6,3 % BUILDR FIRST O (BLDR) -4,4 % Zdroj: Reuters
Microsoft Corp.'s Xbox plans to eliminate 3,200 jobs, or around 20% of its staff over the next year, as part of a massive reorganization to spur growth in the struggling gaming division. Jason Schreier reports on "Bloomberg Open Interest.
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