Microsoft is investing $2.5 billion into a new group focused on assisting clients with AI implementations, becoming the latest tech company to commit hefty resources to helping businesses understand and adopt emerging artificial intelligence technologies.
With the new venture, called Microsoft Frontier Co., the software vendor said Thursday that 6,000 employees will be embedded with clients, in a practice that's become known as forward deployed engineering. The division will contain existing Microsoft FDEs, technical consultants, support staffers and salespeople with experience in specific industries. Rodrigo Kede Lima, who's been leading Microsoft's Asia business, will be its president.
The announcement comes two days after cloud rival Amazon said it was putting $1 billion behind an FDE initiative to support fast-paced AI engagements. Leading AI labs Anthropic and OpenAI both established FDE groups in May, partnering with private equity firms, banks and consulting firms.
Alongside its technology peers, Microsoft has sunk tens of billions of dollars into building data centers that run generative AI models. Microsoft has also released a variety of AI services, with mixed results. The Microsoft 365 Copilot AI assistant has yet to gain anything approaching ubiquity in the business world, and the GitHub Copilot coding agent has ceded market share to newer players.
Microsoft's stock has slumped 21% this year, by far the worst performance among the mega-cap tech companies. One concern on Wall Street is that AI models that quickly compose code might threaten mature software companies.
Judson Althoff, CEO of Microsoft's commercial business, said the FDE effort stems from the realization that "customers are in very different places right now, and trying to really figure out AI."
"Do they snap to one model from OpenAI or one model from Anthropic, or a family of models?" Althoff said in an interview. "Do they take it from a technology first mindset? How do they look at their existing business processes and operations?"
Althoff credits data analytics software vendor Palantir with popularizing the FDE job title. The U.S. military, which keeps forward deployed forces abroad, has long relied on Palantir software, and the company sent FDEs to U.S. bases in Afghanistan, according to the prospectus for its 2020 direct listing.
Earlier this year, Accenture and EY both touted plans to ally with Microsoft on AI-centric FDE programs.
Relative to Palantir, Microsoft supports "more models, we support more connectors to data, more integrations with open systems of record," Althoff said.
Microsoft has for years provided support and implementation services to customers. The company generated about $2.1 billion in revenue from enterprise and partner services in the March quarter, up 2.5% from a year earlier.
Althoff said the company has had the most success when it takes a "very methodical approach towards working with customers to build out an intelligence platform" that protects their intellectual property and allows them to take advantage of "any model in the ecosystem."
A view shows a Microsoft logo at Microsoft offices in Issy-les-Moulineaux near Paris, France, March 25, 2024. REUTERS/Gonzalo Fuentes/File Photo Purchase Licensing Rights, opens new tab
SAN FRANCISCO, July 2 (Reuters) - Microsoft (MSFT.O), opens new tab said on Thursday it is creating a new company that will help customers select AI technologies that work for their businesses and generate returns on their investment.
Microsoft Frontier Company, as the new operating entity is called, will kick off with $2.5 billion in funding from the tech giant to work with clients such as Unilever and Novo Nordisk.
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Large corporations are relying less on renting out AI from a single provider, such as Anthropic or OpenAI, and are instead using a mix of technologies, including open-source models, tailoring them to their needs. This is a costly affair and stretches the time it takes to generate a return on their investment.
Microsoft Frontier Company will offer customers help to select and integrate AI tools - from Microsoft and outside - with that customer's unique internal data. Critically, the customers will get to keep the results of that work rather than send it back to Microsoft.
The Windows operating system maker joins the likes of Palantir Technologies (PLTR.O), opens new tab, which is already using Nvidia's open-source models for such work with large customers, and cloud rival Amazon Web Services (AMZN.O), opens new tab, which kicked off a $1 billion embedded-engineer unit of its own.
Patrick Moorhead, CEO of analyst firm Moor Insights & Strategy, said large businesses suspect that using models from Anthropic and OpenAI will eventually grant these frontier labs expertise to compete with them, especially in fields such as coding and law.
Microsoft partly owns ChatGPT-maker OpenAI and had added Anthropic's models to its Copilot AI assistant earlier this year, partly in response to booming enterprise demand for the AI lab's offerings.
Judson Althoff, CEO of Microsoft Commercial Business, said the new firm was born partly out of Microsoft's own experience when models such as China's DeepSeek and Google's Gemini began to catch up to OpenAI.
"Three years ago, when we built Copilot, we made a mistake by binding it to OpenAI models only," Althoff told Reuters. "You wanted models to amplify your intelligence and be able to have that sort of swappability for state-of-the-art and fine-tuning."
The combination of data and the models mattered more to the customer than any particular model, and they needed the flexibility to switch among AI models quickly, he said.
Reporting by Stephen Nellis in San Francisco; Editing by Harikrishnan Nair
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Satya Nadella says the industry shouldn’t “cede value to a few models that eat everything they see.” (GeekWire File Photo / Kevin Lisota) Microsoft is launching a new AI “company.” It won’t be a separate legal entity, and most of its 6,000 people already work at Microsoft. But the $2.5 billion behind it is real, and the stakes are big, given how many of its AI partners and rivals are racing to do basically the same thing.
The tech giant on Thursday announced “The Microsoft Frontier Company,” which will embed engineers inside customers to build and run AI systems. It will be led by Rodrigo Kede Lima, a longtime Microsoft sales and enterprise leader, most recently president of Microsoft Asia.
This practice is known in the industry as forward-deployed engineering, in which a company sends its own technical employees to work inside a customer’s operations to design, build, deploy and operate AI systems on-site rather than selling a tool and walking away.
The model was pioneered two decades ago by Palantir, but in recent months the approach has become the hot new thing in enterprise AI. Amazon committed $1 billion to its own forward-deployed engineering initiative just two days ago. (Some inside Microsoft suspect that its rival may have caught wind of what it was planning and moved to announce first.)
Anthropic and OpenAI launched rival ventures in May to put engineers inside enterprise customers. Unlike Microsoft’s initiative, the OpenAI Deployment Company, as the ChatGPT maker’s venture is known, is an actual standalone entity — majority-owned by OpenAI but backed by more than $4 billion from a partnership led by the private-equity firm TPG.
Similarly, Anthropic teamed with Goldman Sachs, Blackstone and Hellman & Friedman on a $1.5 billion venture — not yet named — to embed engineers inside mid-sized companies, starting with the investment firms’ own portfolio businesses.
Microsoft is attempting to one-up them all.
“This goes beyond what has been labeled as Forward Deployed Engineering (FDE) and will be the largest, most capable, outcome-driven engineering organization in the industry,” wrote Judson Althoff, CEO of Microsoft’s commercial business, in a post announcing the new initiative Thursday morning.
Responding to questions from GeekWire, a Microsoft spokesperson called the new initiative “a purpose-built company with its own leadership and financial accountability” but stopped short of calling it a separate legal entity or standalone company.
The spokesperson said the organization “brings together more than 6,000 industry, engineering and AI professionals, drawn primarily from Microsoft’s existing engineering and forward-deployed teams,” noting that it will “grow through a combination of internal talent and external hiring across engineering, AI, and industry roles.”
Separately, some consulting roles are among those expected to be impacted by the round of layoffs anticipated next week.
Microsoft wouldn’t say whether the $2.5 billion is new spending or repurposed from existing budgets, or over what period it’s being spent. The company also hasn’t yet spelled out what the new organization means for the future of its existing consulting and services units.
Across the industry, this is happening now because the payoff from AI has proven harder to capture than many companies expected. Businesses across the economy have adopted tools like ChatGPT, Claude, Gemini and Copilot, only to find that impressive demos don’t automatically translate into results. The technology is powerful, but deploying it can be difficult inside a real company, with its own data, rules and entrenched ways of working.
So the AI providers have started sending their own engineers to work inside those companies, figuring out where the AI can actually help, then building it into their operations.
“Having the model alone doesn’t change your workflows or how you operate,” said Marc Nachmann, Goldman Sachs’ global head of asset and wealth management, in an interview with CNBC about the Anthropic partnership. “You need people who can combine the technology with what’s actually happening in the business and implement those changes.”
The big AI providers have multiple reasons to do this. Each of them wants to get more businesses using its AI platform at higher volumes. All of them are looking to drive long-term demand for the AI capacity they’re collectively spending hundreds of billions of dollars to build.
Another big reason: AI models are becoming commodities, getting cheaper and more similar by the month. The big money for the likes of Microsoft is in selling the services needed to make AI pay off inside a company, which is a far bigger market than just selling the models themselves.
Microsoft is pitching privacy and trust as a selling point. Its promise is that a customer’s data and hard-won knowledge stay the customer’s alone. Microsoft says it won’t feed them into training its AI models in ways that would hand the same advantages to the customer’s rivals.
It’s also promising choice: customers can run whichever AI model fits the job, from OpenAI, Anthropic, Microsoft, or open-source providers, not locked into using one.
Microsoft CEO Satya Nadella has argued that a company should be able to exchange one AI model for another without losing all the institutional knowledge it has built up.
That’s his test, as he put it, for whether a business still controls its own future.
“The last thing any of us want is a world where every company across every sector is ceding value to a few models that eat everything they see,” Nadella wrote in a June 14 essay. “If all the value is accrued by only a few models, the political economy will simply not tolerate it. There is no societal permission for an AI future that hollows out entire industries.”
Whether that vision of swappable AI models becomes a reality remains to be seen. There’s actually a risk for customers that the opposite will happen in the forward deployed engineering approach. Even if they can theoretically swap in a competitor’s AI model, working with Microsoft’s engineers means their systems naturally end up running on Microsoft’s cloud platform and related technologies, making it very difficult to jump ship.
It’s also not clear how new all of this really is for the company. Microsoft already runs a large in-house delivery arm — Industry Solutions Delivery, the group that absorbed what used to be called Microsoft Consulting Services — with thousands of consultants and engineers building and deploying technology inside customer organizations.
Microsoft also has programs like FastTrack to help customers roll out its software, and over the past year it has been rolling out “forward-deployed engineering” teams with partners, including a dedicated practice with Accenture and a $1 billion, five-year alliance with EY.
So ultimately the Microsoft Frontier Company is less a new company than a new push behind work the actual company was already doing, albeit bigger and better-branded than before.
Image Credits:Aleksander Kalka/NurPhoto / Getty Images 6:53 AM PDT · July 2, 2026
On Thursday, Microsoft announced a new operating business called Microsoft Frontier company, focused on delivering successful enterprise AI deployments with Microsoft’s existing AI tools. The project will be backed by a $2.5 billion investment from Microsoft, as well as 6,000 industry and engineering experts.
In a statement announcing the venture, Microsoft’s Commercial Business CEO Judson Althoff resisted the Forward Deployed Engineer (FDE) label that is often applied to these ventures. “This goes beyond what has been labeled as Forward-Deployed Engineering,” Althoff wrote, “and will be the largest, most capable, outcome-driven engineering organization in the industry.”
Nonetheless, the venture bears a striking similarity to a number of FDE-based AI ventures announced in recent months. Just two days earlier, Amazon Web Services announced an internal commitment of $1 billlion for its own AI deployment venture, explicitly embracing the FDE model. Both OpenAI and Anthropic have launched joint ventures along similar lines, although those efforts also involve outside capital from private equity firms.
Microsoft’s existing client base will give the new effort a significant head start, as the company has already deployed engineers to much of the Fortune 500. The announcement cites an early partnership with the London Stock Exchange Group, as well as Unilever, Land O’Lakes, and Accenture.
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Russell Brandom has been covering the tech industry since 2012, with a focus on platform policy and emerging technologies. He previously worked at The Verge and Rest of World, and has written for Wired, The Awl and MIT’s Technology Review. He can be reached at [email protected] or on Signal at 412-401-5489.
Venu Krishna went on CNBC’s Closing Bell Overtime on June 30 and argued that the money fleeing Big Tech is running the wrong direction. His pitch: a PEG ratio below 1 for the Mag 7 excluding Tesla, roughly 30% earnings growth in Q1, and multiples that have already been marked down. “Everybody, when they think about rotation, is moving away from them. And those are precisely the areas which we continue to like.”
Krishna’s team lifted its S&P 500 target to 7,800, built on 21% earnings growth this year decelerating to 15-16% next year, with multiples deliberately cut 5-10% across buckets. He is calling the Big Tech setup “fantastic” because you have earnings compounding fast while the multiple has taken a four-handle haircut. For chip stocks, he sees 18 months of earnings visibility from hyperscaler spending with “no sign of reducing,” projecting hyperscaler capex reaching $1.2 trillion in 2028, roughly $250 billion above consensus.
Where the “under 1” math actually lives The argument lands hardest at Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction), which trades at a P/E of 16x after Q1 revenue of $109.9 billion (+21.8% YoY) and Google Cloud growth of 63% with backlog nearly doubling quarter-over-quarter to over $460 billion, per the company’s Q1 2026 earnings release. That is a growth stock at industrial prices.
Meta Platforms (NASDAQ:META) sits at a P/E of 20x with Q1 revenue growth of 33.1%. Microsoft (NASDAQ:MSFT) is at 27x with an AI run rate that hit $37 billion, up 123% year-over-year. Amazon (NASDAQ:AMZN) is at 33x with AWS growing 28%, its fastest in 15 quarters. Apple (NASDAQ:AAPL) is the outlier at 38x on 16.6% revenue growth, which is why the PEG story looks better without it. And NVIDIA is the chip half of Krishna’s thesis, with Q1 FY27 revenue up 85.2% and Data Center revenue of $75.25 billion, +92%.
Then look at what the tape has done. Microsoft is down 22.53% year-to-date and 17.15% over the last month. Meta is down 14.52% YTD. Amazon shed 11.93% in the past month. Meanwhile the Invesco QQQ Trust is up 19.87% YTD. The dispersion is the whole point. Money has crowded into the chip side while selling the platforms that fund the chip side.
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.
The rate risk that could kill the trade Krishna flags rates as the primary equity risk, because AI capex is itself feeding inflation through higher memory, server, and storage costs. That makes Fed cuts unlikely. His base case: no hikes this year, potentially one next year. The 10-year Treasury yield sits at 4.38%, in the 76th percentile of the last 12 months, and Core PCE is running in the 90.9th percentile of its trailing year. Higher discount rates compress the value of distant AI earnings, which is why the “fantastic” setup only stays fantastic if rates behave.
The capex numbers back Krishna’s chip case. Microsoft’s quarterly capex hit $30.88 billion (+84%), Alphabet’s $35.67 billion (+107%), and Meta guided full-year capex up to $125-145 billion. Amazon committed roughly 2 gigawatts of Trainium capacity to OpenAI and up to 5 gigawatts to Anthropic. That spend is already contracted.
What the crowd is actually doing The uncomfortable part of Krishna’s call is that you are buying what everyone else is selling. But if hyperscaler capex really is a durable runway, then sellers of Alphabet near 16x earnings and Meta near 20x are handing away growth stocks at cyclical multiples. The rotation trade assumes AI monetization has topped out at the platform layer. Q1 revenue prints across the group make that a hard argument to defend.
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.
SummaryMicrosoft's RPO surged 99% year over year to $627 billion, with approximately $157 billion expected to convert into revenue within 12 months.AI monetization extends beyond inference, driving strong growth across Cosmos DB, OneLake, Azure infrastructure, storage, compliance, and enterprise data services.AI ARR reached $37 billion, up 123% year over year, while Azure is guided to deliver approximately 40% constant-currency growth next quarter.Microsoft's multi-model AI strategy and Maia/Cobalt silicon should reduce inference costs, supporting long-term margin expansion despite elevated infrastructure investments.Risks include a projected $190 billion FY26 CapEx program, declining cloud gross margins, regulatory scrutiny, and increasing competition following OpenAI's reduced exclusivity. tupungato/iStock Editorial via Getty Images
Investment Thesis Microsoft's (MSFT) narrative has changed dramatically over the last few quarters. The question now is not whether Microsoft can monetize AI but how much monetization has been locked in already. MSFT is
17.13K Followers
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New York, New York--(Newsfile Corp. - July 1, 2026) - 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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A view shows a Microsoft logo at Microsoft offices in Issy-les-Moulineaux near Paris, France, March 25, 2024. REUTERS/Gonzalo Fuentes/File Photo Purchase Licensing Rights, opens new tab
July 2 (Reuters) - A consortium including Microsoft (MSFT.O), opens new tab and telecom startup Lightstorm plans to build a new undersea cable linking India with Malaysia and Singapore as technology firms compete to expand AI and cloud infrastructure in India, one of the world's fastest-growing data markets.
The consortium, whose other members include Tata Communications (TATA.NS), opens new tab, Singapore Telecommunications (STEL.SI), opens new tab, Singapore's ASEAN Cableship and Japan's NEC Corporation, will construct the I-2SEA cable to support AI, cloud and hyperscale workloads, the companies said on Thursday.
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They did not provide additional details including the investment size.
The network will span 3,600 km and have landing stations in Machilipatnam in the southern Indian state of Andhra Pradesh, where Meta (META.O), opens new tab and Alphabet (GOOGL.O), opens new tab have announced data centers.
The cable is expected to be operational in the fourth quarter of 2029, Lightstorm Group CEO and Managing Director Amajit Gupta told Reuters in an interview.
The I Squared-backed company currently connects 19 AI and cloud zones across India through terrestrial fiber cable networks, with the new network expected to bring this number up to 29, Gupta said.
India's operational data center capacity could double from the current 1.4 gigawatts by 2027, based on projects under construction, and increase five-fold by 2030 if planned projects are fast-tracked, Macquarie Equity Research said in a report last October.
Undersea cables carry roughly 95% of the world's internet traffic. India currently has 17 active submarine cables with a maximum potential capacity of 960 terabits per second, and at least 10 more have been publicly announced, according to TeleGeography, a telecommunications research firm.
Separately, Lightstorm plans to list in India in mid-2027, Gupta said, without disclosing any other details. The company was seeking a valuation of up to $1.5 billion in March, according to a media report, opens new tab.
Reporting by Abhirami G in Bengaluru; editing by Chandini Monnappa and Sonia Cheema
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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.
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Microsoft (MSFT +2.95%) stock moved higher in Wednesday's trading as investors shifted their positioning when it came to artificial intelligence stocks. The company's share price closed out the day up 3%. Meanwhile, the S&P 500 fell 0.2%, and the Nasdaq Composite moved 0.7% lower.
Investors moved out of AI chip stocks today and bought back into artificial intelligence software plays. In addition to that positive catalyst, Microsoft also scored a new long-term deal.
Image source: Getty Images.
Microsoft is seeing bullish momentum as AI software regains favor While AI chip stocks have enjoyed very strong bullish momentum this year, many leading artificial intelligence software providers have had a rougher go of things. It's possible that the dynamic is in the early stages of shifting.
It's still too early to proclaim that a sustained rotation back into AI software stocks is underway, but trading over the last week has seen top chip stocks give up some ground and investment capital flow into leading software names. Even with the benefit of some recent bullish momentum, Microsoft stock is still down roughly 20.5% year to date -- and sustained recovery for the broader software space could power more big gains for the stock.
Today's Change
(
2.95
%) $
11.01
Current Price
$
384.03
Microsoft just landed another big long-term deal Haleon announced today that it had entered into a new partnership with Microsoft to expand AI and analytics capabilities across its business. The five-year deal sees Haleon expanding its integration of Microsoft 365 Copilot and other tools. Microsoft stock has seen some pullbacks this year due to concerns about Copilot's competitive positioning compared to rival offerings from Anthropic, OpenAI, and other AI leaders, but the company has been landing deals for the service recently that reinforce how strong its position remains in the enterprise software market.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends Haleon Plc. The Motley Fool has a disclosure policy.
BENSALEM, Pa., July 01, 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
Choosing between high-growth software firms requires balancing market reach against the path to profitability. We compare GitLab (GTLB +4.26%) and MongoDB (MDB +7.22%) to see which cloud-native leader is a better buy today.
GitLab provides a unified platform for software development, security, and operations. MongoDB offers a flexible database solution that handles modern, unstructured data more efficiently than traditional tables. Both are essential tools for digital transformation, yet they occupy different layers of the enterprise technology stack and trade at distinct valuation tiers.
The case for GitLabGitLab sells an orchestration platform that combines software development, security, and operations into a single application. It serves over 50 million registered users and more than half of the Fortune 100 companies. The business operates via direct sales and maintains a global partner ecosystem including cloud providers like Alphabet (GOOG +0.87%) (GOOGL +0.64%) and Amazon (AMZN +2.23%).
In FY 2026, revenue reached nearly $955.2 million, up approximately 25.8% from the previous fiscal year. While the business is expanding, it reported a net loss of close to $56.0 million for the period. This resulted in a negative net margin of roughly 5.9%, a metric that shows how much of each dollar in revenue is lost after all expenses.
As one of many tech stocks focusing on developer productivity, GitLab maintains a healthy balance sheet. As of its January 2026 balance sheet, the debt-to-equity ratio is 0.0x, meaning the company has no debt relative to shareholder equity. Free cash flow for the year was approximately $222.0 million, though stock-based compensation accounted for roughly 92.3% of operating cash flow, inflating reported cash generation.
The case for MongoDBMongoDB provides a modern database platform designed for building applications with flexible, document-based data structures. The company serves over 67,000 customers globally across various industries such as telecommunications and manufacturing. It derives more than the majority of its revenue from its Atlas database-as-a-service offering, which simplifies database management for developers.
For FY 2026, revenue reached close to $2.5 billion, representing a 22.8% increase over the prior year. Despite this scale, the firm posted a net loss of approximately $71.2 million. Its net margin improved to negative 2.9%, indicating the business is moving closer to breakeven compared with the previous year.
Based on its January 2026 balance sheet, the debt-to-equity ratio is 0.0x, and its current ratio is approximately 4.7x. The current ratio measures a company's ability to cover short-term debts with assets that can be converted to cash within a year. Free cash flow reached nearly $500.2 million.
Risk profile comparisonGitLab faces security and privacy risks as an open-source platform, particularly regarding supply-chain attacks and new AI-specific threats. The DevSecOps market is intensely competitive, featuring established players like Microsoft (MSFT +3.79%) and Atlassian (TEAM +6.66%). International operations also introduce complex legal risks regarding its China joint venture and compliance with evolving cross-border data transfer regulations.
MongoDB relies heavily on Atlas for its revenue, meaning any failure of this product to meet customer demand would impact growth. The company faces stiff competition from legacy providers such as Oracle (ORCL 2.63%) and IBM (IBM +2.24%), as well as major public cloud platforms. Additionally, its specific licensing model and vulnerability to ransomware pose ongoing operational concerns for investors.
Valuation comparisonGitLab trades at lower forward P/E and P/S ratios than MongoDB, based on its stock price relative to future earnings estimates and sales.
MetricGitLabMongoDBSector BenchmarkForward P/E35.8x51.3x36.4xP/S ratio5.1x10.3xn/aSector benchmark uses the SPDR XLK sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Both of these companies are attractive long-term investments. They have different strengths, and as the software and technology space is rapidly evolving, a key way to rate one against the other is to consider which is adapting more efficiently. Of course, investors need to consider business fundamentals too. So, between MongoDB and GitLab, which is the better choice for 2026?
MongoDB has benefited from strong growth in its Atlas cloud service, and its artificial intelligence (AI) options are seeing increasing adoption as well. It consistently delivers revenue growth, and its profitability has been improving. And since it seems like everything happens in the cloud these days, its cloud revenue has been a steady, recurring source of income. Its valuation has been a bit high, largely driven by investor optimism about its long-term growth.
GitLab is also seeing strong growth and investing in the development of AI features for its customers to use. But it has faced intense competition from larger rivals, including Microsoft and Atlassian, limiting its pricing power. It has recently faced litigation over its joint venture with China and cross-border data transfers, which is worthy of consideration as well.
With all of this taken into consideration, MongoDB appears to offer the best opportunity for growth and profitability. Therefore, this is the stock I would choose out of this pairing.
Microsoft MSFT shares rose 4% on Wednesday after consumer health company Haleon announced a new five-year agreement to expand its use of Microsoft's artificial intelligence, cloud, and data technologies across its global operations.
The partnership strengthens Microsoft's position in enterprise AI adoption while the company also faces reports that it is preparing another round of job cuts as it continues to invest heavily in artificial intelligence infrastructure.
Microsoft currently trades at a forward 12-month price-to-earnings ratio of 21.52 times.
Under the five-year agreement, Haleon will expand its use of Microsoft 365 Copilot, Azure cloud services, and Microsoft's AI systems throughout its business.
The consumer healthcare company said the technology will help automate routine tasks, improve collaboration, strengthen security, and enhance identity protection across its AI systems.
The companies also plan to jointly develop AI tools for consumer research, product development, supply chain management, and broader business operations.
Haleon said these capabilities are intended to help employees make faster decisions and accelerate the delivery of products to consumers.
The agreement builds on Haleon's existing relationship with Microsoft and supports the company's goal of reaching one billion more consumers by 2030.
For Microsoft, the deal represents another large enterprise customer adopting its AI platform, further expanding the commercial deployment of its artificial intelligence offerings.
The AI expansion comes as Microsoft is reportedly preparing to reduce its workforce.
According to a Business Insider report, the company could announce thousands of job cuts as early as next week.
The layoffs are expected to affect fewer than 2.5% of Microsoft's approximately 228,000 full-time employees.
The reported reductions would be smaller than the company's previous round of layoffs, when Microsoft eliminated roughly 4% of its workforce.
While job reductions within the Xbox division had been widely anticipated following ongoing pressure on the gaming business, the report said sales and consulting roles could also be affected.
Microsoft has not officially confirmed the reported layoffs.
The timing coincides with the end of Microsoft's fiscal year on June 30, a period when the company has historically reviewed budgets, staffing levels, and strategic priorities.
The reported workforce reductions also reflect a broader trend across the technology industry, where companies continue to trim headcount while increasing investment in AI infrastructure.
Valuation and analyst outlook remain favorableDespite falling 23% during the first half of 2026, Microsoft is increasingly being viewed as a value stock because of its earnings profile and expected revenue growth.
According to MarketWatch contributor Mark Hulbert, historical data dating back to 1947 shows that value stocks have generally outperformed growth stocks during periods of rising inflation, similar to the current economic environment.
Microsoft is expected to grow revenue at more than twice the pace of the S&P 500 through 2028, according to a MarketWatch report.
Wall Street analysts also remain broadly optimistic on the company's outlook.
According to TipRanks, 35 of 36 analysts covering Microsoft rate the stock a Buy, while one recommends Hold. None have a Sell rating.
The average 12-month price target stands at $562.10, implying about 38% upside from current levels, reflecting continued confidence in Microsoft's long-term AI strategy and enterprise software business.
Determining whether to hold Vanguard Russell 1000 Growth ETF (VONG 0.92%) or State Street SPDR S&P 600 Small Cap Growth ETF (SLYG 0.39%) depends on whether an investor seeks large-cap technology dominance or small-cap market agility.
While both funds focus on growth, they target entirely different segments of the American equity market. VONG tracks established giants and market leaders, whereas the SPDR fund targets smaller, nimbler companies that have met specific growth and profitability criteria, creating distinct risk and return profiles for long-term investors.
Snapshot (cost & size)MetricSLYGVONGIssuerSPDRVanguardShare price$119.13 (as of 2026-06-30)$127.81 (as of 2026-06-30)Expense ratio0.15%0.06%1-yr return (as of 2026-06-30)35.30%17.60%Dividend yield0.60%0.50%Beta1.041.16AUM$5.2 billion$54.8 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the June 30 market close.
VONG is the more affordable option, with a 0.06% expense ratio, offering a notable cost advantage over SLYG’s 0.15%. While SLYG has recently provided a higher payout, the yield gap between the two funds remains narrow at 0.10 percentage points.
Performance & risk comparisonMetricSLYGVONGMax drawdown (5 yr)(29.20%)(32.70%)Growth of $1,000 over 5 years (total return)$1,412.0$1,888.0What's insideVanguard Russell 1000 Growth ETF allocates its capital to large-cap American corporations, seeking capital appreciation through established market leaders. The portfolio contains 387 holdings and is heavily concentrated in technology at 53.9%, with consumer cyclical and communication services both around 12%. Its largest positions include Nvidia (NVDA 0.14%) at 13.1%, Apple (AAPL +1.86%) at 11.9%, and Microsoft (MSFT +3.79%) at 9%. The fund was launched in 2010. Vanguard Russell 1000 Growth ETF has paid $0.58 per share over the trailing 12 months, which, on its recent $127.8 share price, works out to a 0.5% yield.
State Street SPDR S&P 600 Small Cap Growth ETF mirrors the S&P SmallCap 600 Growth Index, selecting smaller companies with robust sales expansion and market momentum. The fund holds 341 stocks, leaning toward technology at 21.2%, industrials at 18.7%, and healthcare at 14.7%. Its largest positions include Sanmina Corp (SANM 1.79%) at 1.8%, Viavi Solutions (VIAV 2.45%) at 1.3%, and Viasat Inc (VSAT 4.94%) at 1.3%. This ETF was launched in 2000. State Street SPDR S&P 600 Small Cap Growth ETF has paid $0.76 per share over the trailing 12 months, which, on its recent $119.1 share price, works out to a 0.6% yield.
The State Street SPDR S&P 600 Small Cap Growth ETF, SLYG, has had a great 52-week period, with its 35.3% total return about double that of the Vanguard offering. The fund has seen its price accelerate since April, reflecting the strongest quarterly performance for U.S. small-cap equities since 1991.
The Vanguard Russell 1000 Growth ETF, meanwhile, sees its 52-week lag of SLYG due to its weighting in large-cap stocks: 88% of VONG is in large-cap stocks and just 2% in small caps. It has missed the small-cap rally because it is barely in the category.
If you’re looking for a small-cap fund to buy, the State Street fund is the pick here. But if you’re seeking the better fund regardless of strategy, then VONG wins this battle. The fund has bested SLYG over the 3-, 5-, and 10-year time frames, returning 22.5%, 13.7%, and 18.5% annualized, respectively. The State Street fund has been good, but not as good as the Vanguard ETF, returning 16.4%, 5.6% and 10.9% over the 3-year, 5-year, 10-year look-backs, respectively.
For more guidance on ETF investing, check out the full guide at this link.
Shares of Meta Platforms (NASDAQ:META | META Price Prediction) are up 10% to $619 in morning trading, marking one of the sharpest single-session moves for the stock this year. The catalyst is a Bloomberg report that the company is building a cloud infrastructure business to sell its excess AI computing capacity to outside customers. If confirmed, the shift would put Meta Platforms into direct competition with the biggest names in cloud.
The jump reframes a stock that had been under sustained pressure. Meta Platforms stock is still down 7.45% year to date, as investors questioned the payoff on the company’s aggressive AI capital spending. Today’s rally begins to close that gap.
The report recasts a heavy capex line as a potential new revenue stream rather than a pure cost center. That single narrative shift is doing most of the work in today’s move.
Bloomberg Report Frames AI Capex as Potential Revenue Stream Per Bloomberg, Meta Platforms is weighing two options: hosting AI models for developers to access (compared to Amazon‘s (NASDAQ:AMZN) AWS Bedrock), and renting out raw compute capacity as a “neocloud,” an approach the report explicitly likened to CoreWeave (NASDAQ:CRWV). If it proceeds, the business would compete directly with Amazon Web Services, Microsoft (NASDAQ:MSFT) Azure, and Alphabet‘s (NASDAQ:GOOGL) Google Cloud. Those three remain the entrenched incumbents in the space.
Important caveat: this remains an unconfirmed report. Meta Platforms has not verified the plan, and Reuters said it could not independently verify the details. Readers should treat the story as reported, not confirmed.
The report echoes comments Meta Platforms CEO Mark Zuckerberg made at the company’s May shareholder meeting, where he called the idea “definitely on the table”. He noted that companies ask “almost every week” to buy Meta Platforms’ spare compute or model access at a premium, framing external sales as a hedge in case the company overbuilt.
The financial backdrop makes the pivot plausible. Meta Platforms raised its 2026 capex guide to $125 billion to $145 billion to support data center capacity, and it has already stood up Meta Superintelligence Labs. That is a scale of infrastructure that could support external tenants.
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.
CoreWeave Slides on Competitive Read-Through The clearest peer reaction is in the neocloud space. CoreWeave stock is down 12% today, a likely read-through to the risk that a well-capitalized hyperscaler entering the raw-compute-rental market compresses pricing for pure-play providers. Framed as probable rather than confirmed causation, the direction of travel is clear.
The stakes for CoreWeave are meaningful. Meta Platforms is already CoreWeave’s largest customer via a $21 billion commitment signed earlier this year, part of a total book that helped push CoreWeave’s backlog to $99.4 billion. A Meta Platforms pivot from buyer to seller could reshape that customer relationship over time.
The bigger reframe is industry-wide. Big Tech is expected to spend more than $700 billion on AI infrastructure this year, up from around $400 billion in 2025. Monetizing even a slice of that capacity externally would diversify a Meta Platforms revenue base still heavily reliant on advertising.
What to Watch The community read is split. Some investors see the plan as validating Meta Platforms’ aggressive AI spending, while skeptics wonder if it signals hedging against internal AI demand falling short of the buildout. Reddit sentiment on WallStreetBets swung from a very bearish score of 12 on June 21 to a very bullish 90 on June 24 as the story broke.
The prediction markets echo the shift. Polymarket assigns a 0.84 probability that Meta Platforms stock hits $620 in July and puts Meta Platforms ahead of OpenAI on year-end valuation at a 0.62 probability.
The next catalysts are official confirmation or denial from Meta Platforms and any commentary from AWS, Azure, and Google Cloud on pricing or capacity. Investors can watch for whether today’s gains hold into the close and whether CoreWeave stock stabilizes. The takeaway: this is a credible reframe of a maligned capex story, but it hinges on a report the company hasn’t confirmed, so investors should consider keeping their META position sizes modest until the plan is verified.
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.
MSFT Shareholder Alert: Investors With Losses May Seek to Lead the Class Action in Microsoft Corporation Securities Lawsuit - Contact Levi & Korsinsky PR Newswire
NEW YORK, July 1, 2026
Executive Accountability: Jared Spataro's "70% of the Fortune 500" Copilot Claims Now at the Center of Microsoft Securities Action
, /PRNewswire/ -- Levi & Korsinsky, LLP notifies investors that Jared Spataro, Microsoft Corporation's (NASDAQ: MSFT) Chief Marketing Officer for AI at Work, is named as a defendant in a securities class action covering purchases between May 1, 2025 and January 28, 2026. Find out if you qualify to recover losses from the MSFT securities action. You may also contact Joseph E. Levi, Esq. at [email protected] or (212) 363-7500.
Microsoft shares traded above $550 per share during the Class Period as the Company promoted Copilot's alleged widespread enterprise adoption. The lead plaintiff deadline is August 11, 2026.
Spataro's Role as Microsoft's AI Marketing Chief
As AI CMO, Spataro served as Microsoft's primary external spokesperson for Copilot's commercial traction and enterprise adoption story. The complaint identifies Spataro as directly involved in crafting and disseminating public statements about Copilot's market performance to analysts and institutional investors at major industry conferences.
At the September 10, 2025 Goldman Sachs Communacopia & Technology Conference, Spataro allegedly made specific, quantifiable claims about Copilot adoption that the lawsuit contends were materially misleading, including:
Claiming "more than 90% of the Fortune 500 now use Microsoft 365 Copilot" while the product allegedly suffered from significant brand positioning and interoperability failuresRepresenting that the most recent quarter was Copilot's "best quarter ever both in terms of seat adds" and customer count Asserting Copilot was the "fastest-growing M365 portfolio product" Microsoft had ever launchedStating Microsoft could "improve efficiency by 20% to 30%" through Copilot, characterizing such gains as "just real nuts and bolts"What Spataro Allegedly Failed to Disclose
The action contends that while Spataro promoted Copilot as achieving record adoption, the product was experiencing serious internal problems including data siloing, computational capacity constraints, user experience deficiencies, and organizational challenges that undermined the adoption narrative he presented to investors.
The complaint charges that Spataro, as the executive responsible for Copilot's market positioning, was privy to confidential information about these product shortcomings and either knew or recklessly disregarded that his public statements painted a materially incomplete picture of Copilot's actual performance.
Section 20(a) Context for Spataro
Under Section 20(a) of the Securities Exchange Act of 1934, individuals who exercise control over a company's public statements may bear personal liability when those statements are alleged to contain material misrepresentations. The complaint asserts Spataro was directly involved in drafting, reviewing, and disseminating the challenged statements and had the ability to prevent their issuance or cause them to be corrected.
"Individual officers who sign SEC certifications bear personal responsibility for the accuracy of corporate disclosures. When executives make specific quantitative claims about product adoption at major investor conferences, those statements carry particular weight in the market." -- Joseph E. Levi, Esq.
Speak with an attorney about Spataro's alleged role in Microsoft investor losses or call (212) 363-7500.
LEAD PLAINTIFF DEADLINE: August 11, 2026
Levi & Korsinsky, LLP, Top 50 securities litigation firm (ISS, seven consecutive years). Over 70 professionals. Hundreds of millions recovered for investors.
Frequently Asked Questions About the MSFT Lawsuit
Q: Who are the defendants named in the MSFT lawsuit? A: The complaint names Microsoft Corporation and individual defendants including senior executives who made public statements about Copilot's adoption and AI performance, signed SEC filings, or certified financial disclosures under Sarbanes-Oxley.
Q: What specific misstatements does the MSFT lawsuit allege? A: The complaint alleges Microsoft made materially false or misleading statements regarding the success, adoption, and performance of its Copilot AI products and Azure cloud platform while concealing significant technical and organizational problems. When the true state was revealed, the stock price declined.
Q: What do MSFT investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at [email protected] or (212) 363-7500. No immediate action is required to remain eligible as a class member.
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.
Q: What if I already sold my MSFT shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.
Q: How long will the lawsuit take to resolve? A: Securities class actions typically take two to four years from initial filing to resolution.
View original content to download multimedia:https://www.prnewswire.com/news-releases/msft-shareholder-alert-investors-with-losses-may-seek-to-lead-the-class-action-in-microsoft-corporation-securities-lawsuit---contact-levi--korsinsky-302815479.html
Microsoft is reportedly planning yet another round of layoffs that will slash thousands of roles next week in an effort to cut costs, as concerns about out-of-control AI spending mount.
Less than 2.5% of the company’s 220,000-person workforce – or fewer than 5,500 workers – will be axed from the sales and consulting divisions, as well as Xbox’s gaming unit, according to Business Insider.
The Redmond, Wash.-based software giant plans to announce the layoff round next week, just after the start of its new fiscal year on Wednesday, though the timing could change, sources told the outlet. Some impacted employees will be offered new roles within the company immediately.
Microsoft CEO Satya Nadella speaks at CES 2024, a massive tech conference, in Las Vegas on Jan. 9, 2024. Getty Images Microsoft declined to comment.
It would mark its third major round of layoffs in just over a year, after slashing 6,000 jobs last May and another 9,000 – or 4% of its workforce – last July.
Amid the rapid rise of AI, the company has been facing both concerns that it’s spending too much on the new tech – with commitments of $190 billion on new infrastructure over the coming years – and fears that bots could render traditional software tools obsolete.
Shares in Microsoft tanked 19% in June for the stock’s worst month since the dot-com crash of the early 2000s.
News of additional layoffs comes as little surprise after Microsoft earlier this year launched a voluntary retirement buyout round for US employees whose years of employment and age are 70 or higher when added together.
About a third of the company’s 9,000 eligible workers took the offer, allowing Microsoft to cut fewer roles in this year’s expected layoff round, a source told Business Insider.
Layoffs have also been anticipated in Microsoft’s gaming unit, after new Xbox CEO Asha Sharma called for a “resetting” of the company,” saying it was “not in a healthy spot” amid declining revenue.
Xbox recently hiked prices for its hardware ofr the third time since late 2025. CFOTO/Future Publishing via Getty Images Xbox has spent the past two years closing studios, canceling new game releases and raising prices on its consoles as skyrocketing data center demand for chips sends component prices higher.
Last week, Apple blamed chip shortages as it hiked prices for its computers, tablets and home devices by as much as $500.
Xbox quickly followed suit with its third price hike on hardware since late 2025, raising prices by $150 across its suite of gaming consoles.
So far this year, nearly a third of all job cuts have hit the tech sector – and AI came in as the leading reason for announced layoffs in June for the fourth month in a row, according to a Challenger, Gray & Christmas report released Wednesday.
Microsoft and Apple have blamed recent price hikes on higher component costs amid chip shortages. REUTERS “The pace of layoffs cooled considerably in June, similar to plans last June, and as is typical for summer months,” Andy Challenger, the firm’s workplace expert and chief revenue officer, said in a statement.
“That said, the cuts we are seeing remain concentrated in technology, and artificial intelligence continues to reshape how companies think about headcount.”
Since 2023, when AI first emerged as a driving force in layoffs, the new tech has been cited in 173,568 job cut announcements, according to Challenger.
Microsoft MSFT currently trades at a forward 12-month price-to-earnings ratio of 21.52X, above the Zacks Computer - Software industry's 18.83X, underscoring a valuation premium that has investors debating the stock's near-term direction. The company carries a Value Score of C, suggesting shares are not particularly cheap relative to peers in the sector at current levels.
GERMANY - 2026/06/10: In this photo illustration, the logo of productivity software Microsoft 365 is displayed on a smartphone in front of abstract background on computer screen. (Photo Illustration by Timon Schneider/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
A new business within Microsoft (MSFT) has quietly grown to massive scale. The company's AI segment has crossed a $37 billion annual run rate, expanding at an astonishing 123%. This new growth engine already represents a meaningful portion of Microsoft Cloud, which itself exceeded $54 billion in quarterly revenue. This is not a future promise; it is a current reality.
This rapid growth is why the upside case is centered on revenue. The Intelligent Cloud segment, which houses these AI services, grew 30% to become a $34.7 billion quarterly business. Continued compounding from this base is the main driver of the stock's potential upside.
That is the story. The question is whether it is strong enough to drive meaningful upside from here, or whether today’s price already reflects most of that optimism. Yes, but with caveats. A conservative 3-year scenario points to roughly 49%. Revenue compounding does the heavy lifting, while the multiple barely changes.
Here is the operational picture behind the math:
MSFT Key Metrics
Trefis
How Compounding Builds The UpsideRevenue compounds at 15.2% annually, lifting the top line from $318.3B to $486.5B over three years. That is a step down from the LTM 17.9% pace, since today's acceleration is unlikely to extrapolate cleanly over a full three-year period.
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Margins ease from 39.3% to 38.3% as today's LTM level gives back slightly toward the longer-run average. Together, that lifts earnings from $125.2B to roughly $186.1B, a 49% increase.
The model assumes a constant price-to-earnings (P/E) multiple of 21.9x, implying that earnings growth alone drives the projected valuation gain. Applying that multiple to higher earnings puts the stock near $547.83, with a market cap of $4.1T versus $2.7T today. That is roughly 49% above where the stock trades now.
Has revenue compounding been the lever behind MSFT's recent move? See the lever breakdown.
What Could Accelerate The Top LineThe next leg of growth could come from a fundamental shift in the business model, as management explained that per-user businesses will become both per-user and usage-based. With Microsoft 365 Copilot seat additions already up 250% year-over-year, layering consumption on top of this adoption curve creates a new, unmodeled revenue opportunity.
What Could Slow It DownThe main concern raised on the call is the sheer scale of investment needed to support this growth. Management expects to invest roughly $190 billion in capital expenditures in calendar year 2026 alone. This spending pace creates what one analyst described as a disconnect, making investors nervous about the timing of the return.
Is The Compounding Real?For this case to play out, revenue needs to keep compounding near 15.2%, a step down from today's 17.9% but still clearly positive. The multiple is not being asked to do anything dramatic, which makes the case more defensible. The projected margin also sits at or near the 3-year peak, so any move back toward the longer-run average would make the rest of the math more difficult.
While the shift to usage-based pricing provides a clear revenue catalyst, the planned $190 billion capital investment creates meaningful near-term risk.
Should You Invest In Microsoft?A careful 3-year case on a single company is still a concentrated bet, as historical volatility across past market crises shows. Investors who build analyses like this around individual positions often want the same framework applied across a diversified book, partly for discipline and partly because even the cleanest single-stock thesis can break for reasons the math does not capture.
The Trefis High Quality (HQ) Portfolio combines analytical rigor with a forward-looking view across 30 stocks, using a consistent selection framework and a sizing and re-balancing discipline designed to deliver upside without the single-name risk described here. By selecting 30 high-conviction stocks, the HQ strategy has historically outpaced a benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.
The agreement aims to increase the adoption of AI-powered tools across the business while strengthening Haleon’s digital infrastructure with advanced security, identity, and agentic AI capabilities.
AI Collaboration Targets Productivity And Business TransformationThe partnership builds on Haleon’s existing use of Microsoft 365 Copilot and helps employees automate repetitive tasks, improve collaboration, and dedicate more time to higher-value work.
The companies also plan to jointly develop AI applications across several key business functions, including consumer insights, innovation, supply chain management, and commercial execution.
Haleon expects these initiatives to support faster scientific research, speed up clinical content development, improve marketing personalization, and strengthen forecasting and business decision-making.
Focus On Consumer Insights And Operational EfficiencyAccording to the company, expanding its AI capabilities will provide deeper insights into changing consumer preferences while helping accelerate product innovation and streamline operations from manufacturing through commercial activities.
Haleon said it intends to use the technology investments to respond more quickly to growing consumer demand, deliver more personalized health products, and improve product availability across global markets.
The company added that these efforts support its broader objective of reaching one billion more consumers by 2030 while delivering industry-leading shareholder returns.
Azure, Copilot And Agentic AI Form Core Of StrategyAs part of the agreement, Haleon will continue using Microsoft Azure as its primary cloud platform and Microsoft Copilot as a foundation for its enterprise AI initiatives.
The company said Azure’s scalable infrastructure, analytics capabilities, and enterprise-grade security features will help protect data, systems, and AI-powered workflows as it expands AI deployment responsibly and securely.
Haleon also plans to advance its use of next-generation agentic AI, enabling intelligent digital agents that can assist teams in identifying opportunities sooner, responding more quickly to changing conditions, and supporting better outcomes for consumers, customers, and healthcare professionals.
The company said the collaboration aligns with its ambition to build an AI-powered, decision-intelligent enterprise where data and insights enable faster, smarter, and more consumer-focused decision-making.
HLN Price Action: Haleon shares were up 0.48% at $9.37 at the time of publication on Wednesday, according to Benzinga Pro data.
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CHANDLER, Ariz.--(BUSINESS WIRE)--Insight Enterprises (NASDAQ: NSIT) today announced it has signed an agreement to formalize its role as a launch partner for Microsoft 365 E7, Microsoft's Frontier Suite that combines advanced productivity and security with artificial intelligence (AI) built for work and capabilities to manage and secure AI agents. As one of the first enterprises to deploy Microsoft's Frontier Suite across its own 14,000+ employee global enterprise, Insight will be client zero f.
New York, New York--(Newsfile Corp. - July 1, 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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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/301525
Source: Bronstein, Gewirtz & Grossman, LLC
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Apple (AAPL +1.78%) continues to maintain its status as one of the three most valuable companies in the world (behind Nvidia and trading No.2 and No. 3 positions regularly with Alphabet). Investors are paying less attention to Apple in the age of AI, but it has still been a strong stock pick over the past year, although it hasn't escaped the recent tech sell-off. However, I'm not convinced that all of this rally is driven by business gains, and I think there are far better values out there.
One of the biggest (if not the biggest) bargains I can think of right now is the fourth-largest company in the world: Microsoft (MSFT +3.47%). If you're deciding between the two, I think Microsoft makes for a far better value, and I've got a few metrics to back that up.
Image source: Getty Images.
Microsoft's stock is cheap compared to Apple and its own average Valuing a stock can be done in numerous ways. Given two mature businesses that generate mountains of profits, the price-to-earnings (P/E) ratio is a commonly used valuation metric. From this standpoint, Microsoft is trading at a low valuation compared to historical levels and is about 50% cheaper than Apple.
Data by YCharts.
That's a huge delta between the two, but that's not the only way these companies are valued. Investors also like to account for growth in their valuations, so they'll also utilize the forward P/E ratio to get an idea of where the stock is heading. Both Apple and Microsoft operate on non-traditional fiscal years; Microsoft's wraps up at the end of June, and Apple's is complete in September. Because we're nearing the end of both fiscal years, I'll use fiscal year 2027 projections for each of them.
Data by YCharts.
The same gap exists in the forward earnings valuation as in the trailing earnings valuation, suggesting that their future growth rates are likely to be similar. So, if that's the case, then why would you want to own Apple stock versus Microsoft's? Well, some good reasons would be fear of overspending on AI on Microsoft's part, AI replacing some of Microsoft's staple software applications, or Microsoft's overreliance on its partnership with OpenAI. Those are some bearish arguments against Microsoft's stock, but I think they carry roughly the same weight as those against Apple. Apple hasn't spent much on AI, hasn't released a major iPhone revision for years, and hasn't launched a major new product recently, either.
Today's Change
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There are valid arguments against both companies, but I still think each is holding its own in the current market. As a result, Microsoft looks like the better buy because its stock is far cheaper and could easily enter a multiple expansion phase, leading to major gains as the market values it higher. That could drive large returns in a short time frame, making it a time-sensitive buy as well.
Keithen Drury has positions in Microsoft. The Motley Fool has positions in and recommends Apple and Microsoft. The Motley Fool has a disclosure policy.
HomeInvestingDeep DiveDeep DiveValue stocks tend to outperform growth stocks during periods of high inflation. These companies in the Russell 1000 Value Index have high revenue growth estimates for the next two years.July 1, 2026, 12:10 p.m. ET
Let us begin with a midyear summary of index results that might surprise you in light of the triple-digit gains for so many growth stocks in the S&P 500.
Here is how several broad large-cap indexes performed during the first half of 2026, with dividends reinvested:
SummaryMicrosoft presents a compelling dip-buying opportunity as current prices sit significantly below recent highs despite robust fundamental growth. The stock's performance in 2026 mirrors historical tech bear market patterns, yet current valuations are far more reasonable than in 2000. A perceived slowdown in commercial bookings stems primarily from data center capacity constraints rather than a fundamental decline in enterprise cloud demand. Microsoft maintains a formidable balance sheet with low net debt, providing the resilience needed to continue its strategic AI infrastructure investments. By integrating AI agents like Copilot across its ecosystem, the company is positioning itself to capture lead revenue in the next era of enterprise computing. Getty Images
Dip buying opportunity in a market leader Microsoft Corp. (NASDAQ:MSFT), is experiencing one of it's worst months, and drawdowns from all time highs, ever:
We have to go back to the year 2000 to find a worse
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT, META, GOOGL 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.
Disclaimer: The information in this article is intended for general informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. The views expressed are solely those of the author, based on independent research, analysis, and professional experience. Although the author is a CERTIFIED FINANCIAL PLANNER™ (CFP®) and owner of Ashcroft Green Advisors, a fee-only registered investment advisory firm, the content may not be suitable for your individual financial situation, objectives, or risk tolerance. Readers should consult with a qualified financial professional before making any decisions based on this material. The author and/or clients of Ashcroft Green Advisors may hold positions in securities discussed in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Executive Accountability: Jared Spataro's "70% of the Fortune 500" Copilot Claims Now at the Center of Microsoft Securities Action
, /PRNewswire/ -- Levi & Korsinsky, LLP notifies investors that Jared Spataro, Microsoft Corporation's (NASDAQ: MSFT) Chief Marketing Officer for AI at Work, is named as a defendant in a securities class action covering purchases between May 1, 2025 and January 28, 2026. Find out if you qualify to recover losses from the MSFT securities action. You may also contact Joseph E. Levi, Esq. at [email protected] or (212) 363-7500.
Microsoft shares traded above $550 per share during the Class Period as the Company promoted Copilot's alleged widespread enterprise adoption. The lead plaintiff deadline is August 11, 2026.
Spataro's Role as Microsoft's AI Marketing Chief
As AI CMO, Spataro served as Microsoft's primary external spokesperson for Copilot's commercial traction and enterprise adoption story. The complaint identifies Spataro as directly involved in crafting and disseminating public statements about Copilot's market performance to analysts and institutional investors at major industry conferences.
At the September 10, 2025 Goldman Sachs Communacopia & Technology Conference, Spataro allegedly made specific, quantifiable claims about Copilot adoption that the lawsuit contends were materially misleading, including:
Claiming "more than 90% of the Fortune 500 now use Microsoft 365 Copilot" while the product allegedly suffered from significant brand positioning and interoperability failures Representing that the most recent quarter was Copilot's "best quarter ever both in terms of seat adds" and customer count Asserting Copilot was the "fastest-growing M365 portfolio product" Microsoft had ever launched Stating Microsoft could "improve efficiency by 20% to 30%" through Copilot, characterizing such gains as "just real nuts and bolts" What Spataro Allegedly Failed to Disclose
The action contends that while Spataro promoted Copilot as achieving record adoption, the product was experiencing serious internal problems including data siloing, computational capacity constraints, user experience deficiencies, and organizational challenges that undermined the adoption narrative he presented to investors.
The complaint charges that Spataro, as the executive responsible for Copilot's market positioning, was privy to confidential information about these product shortcomings and either knew or recklessly disregarded that his public statements painted a materially incomplete picture of Copilot's actual performance.
Section 20(a) Context for Spataro
Under Section 20(a) of the Securities Exchange Act of 1934, individuals who exercise control over a company's public statements may bear personal liability when those statements are alleged to contain material misrepresentations. The complaint asserts Spataro was directly involved in drafting, reviewing, and disseminating the challenged statements and had the ability to prevent their issuance or cause them to be corrected.
"Individual officers who sign SEC certifications bear personal responsibility for the accuracy of corporate disclosures. When executives make specific quantitative claims about product adoption at major investor conferences, those statements carry particular weight in the market." -- Joseph E. Levi, Esq.
Speak with an attorney about Spataro's alleged role in Microsoft investor losses or call (212) 363-7500.
LEAD PLAINTIFF DEADLINE: August 11, 2026
Levi & Korsinsky, LLP, Top 50 securities litigation firm (ISS, seven consecutive years). Over 70 professionals. Hundreds of millions recovered for investors.
Frequently Asked Questions About the MSFT Lawsuit
Q: Who are the defendants named in the MSFT lawsuit? A: The complaint names Microsoft Corporation and individual defendants including senior executives who made public statements about Copilot's adoption and AI performance, signed SEC filings, or certified financial disclosures under Sarbanes-Oxley.
Q: What specific misstatements does the MSFT lawsuit allege? A: The complaint alleges Microsoft made materially false or misleading statements regarding the success, adoption, and performance of its Copilot AI products and Azure cloud platform while concealing significant technical and organizational problems. When the true state was revealed, the stock price declined.
Q: What do MSFT investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at [email protected] or (212) 363-7500. No immediate action is required to remain eligible as a class member.
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.
Q: What if I already sold my MSFT shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.
Q: How long will the lawsuit take to resolve? A: Securities class actions typically take two to four years from initial filing to resolution.
NEW YORK, July 01, 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.
Microsoft is preparing to cut thousands of jobs as early as next week, according to a Business Insider report, in another sign that Big Tech’s AI spending boom is coming with a human cost.
The cuts are expected to affect less than 2.5% of Microsoft’s roughly 2,28,000 full-time employees.
Xbox layoffs had already been widely expected after months of pressure on the gaming business. The more telling detail is that sales and consulting roles are also reportedly in scope.
That makes this bigger than another Xbox restructuring.
It fits a broader 2026 pattern as tech giants are trimming traditional headcount while pouring record sums into AI infrastructure.
Microsoft has not officially confirmed the new layoffs.
The reported cuts would be smaller than Microsoft’s big layoff round last year, when the company eliminated roughly 4% of its workforce.
The timing also fits a familiar corporate pattern as Microsoft’s fiscal year ends on June 30, and the company often uses that period to review budgets, teams and priorities for the year ahead.
Still, the areas reportedly affected are important.
Xbox has already been under pressure after console price hikes, marketing cuts and questions over the future shape of Microsoft’s gaming division.
Microsoft recently said it would raise Xbox console prices globally from August, blaming a worsening components shortage, especially in storage and memory.
Reports from Bloomberg and The Information have also said Microsoft has been weighing deeper changes to Xbox, including restructuring options and possible studio changes.
Sales and consulting teams are not usually the first place investors look when they hear “AI layoffs”.
These are customer-facing roles and help win contracts, manage relationships and support implementation.
Cutting them suggests Microsoft is not only automating back-office work or trimming underperforming products.
It may also be rethinking how many people it needs to sell and support software in an AI-heavy enterprise market.
Challenger, Gray & Christmas said AI had been cited in 87,714 job cuts so far in 2026 by the end of May, already more than the total attributed to AI in all of 2025.
Tech-sector cuts have also climbed sharply this year.
Microsoft is not alone as Meta began layoffs affecting about 10% of its workforce this year.
Amazon confirmed 16,000 corporate job cuts in January, completing a broader plan for about 30,000 reductions since October.
Oracle’s workforce fell by about 21,000 employees in fiscal 2026 as it restructured around AI and cloud infrastructure.
The problem is that “AI made us do it” has become too easy an explanation.
Nvidia CEO Jensen Huang has pushed back on executives who blame layoffs on AI, calling that narrative “lazy”.
His argument is that most companies have not deployed AI at enough scale to justify sweeping workforce reductions.
Gartner has made a similar point. Helen Poitevin, a Gartner vice president analyst, said workforce reductions may create budget room, but they do not create returns.
Gartner’s May survey of 350 executives found that companies cutting more staff were not clearly getting better financial results from autonomous technologies than those cutting less.
Cognizant Chief AI Officer Babak Hodjat has also argued that AI is sometimes used as a scapegoat for earlier overhiring and weak cost discipline.
OpenAI CEO Sam Altman has called this “AI washing,” a term used for companies blaming AI for decisions they may have made anyway.
HomeIndustriesMicrosoft has been engaging in a series of layoffsJuly 1, 2026, 5:29 a.m. ET
Shares in Microsoft have slumped 19% in the past month. Photo: Getty ImagesMicrosoft is reportedly planning to announce thousands of layoffs as the company aims to increase spending on artificial intelligence.
The tech giant is expected to cut less than 2.5% of its overall workforce of about 220,000 people, according to people familiar with the matter, Business Insider reported on Tuesday night.
About the Author
Nora Redmond is a MarketWatch reporter based in London.
New York, New York--(Newsfile Corp. - June 30, 2026) - 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.
Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm, on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm/.
Attorney Advertising. Prior results do not guarantee a similar outcome.
-------------------------------
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/303555
Source: The Rosen Law Firm PA
Ready to Announce with Confidence? Send us a message and a member of our TMX Newsfile team will contact you to discuss your needs.
by Todd Bishop on Jun 30, 2026 at 6:30 pmJune 30, 2026 at 6:50 pm
GeekWire File Photo Microsoft is preparing to cut thousands of jobs next week, continuing to rein in operating costs as the company pours unprecedented sums into AI infrastructure.
Business Insider broke the news Tuesday afternoon, saying that the cuts will impact less than 2.5% of the company’s global workforce of about 220,000 people. It includes not just Xbox, where cuts have been signaled for weeks, but also layoffs in sales and consulting.
GeekWire confirmed the details of the report with a person familiar with the company’s plan. Microsoft isn’t commenting on the report.
The timing follows a familiar pattern. Microsoft often restructures its operations around the close of its fiscal year on June 30, and the cuts would come just as the new year begins.
The reductions were bigger last year. Microsoft laid off more than 15,000 people in two rounds of cuts a few weeks apart: about 6,000 in May 2025, then around 9,000 (roughly 4% of the company at the time) in early July 2025.
One difference this year: Microsoft’s first-ever voluntary retirement program. About a third of the approximately 8,750 eligible U.S. employees took the buyout, reportedly allowing the company to cut a smaller share of its workforce through layoffs than a year ago.
The company is on pace to spend more than $100 billion building AI and cloud infrastructure in the fiscal year that just ended — up from $88.7 billion the year before — with about two-thirds going to the chips that power AI.
Microsoft shares closed Tuesday at $373.02, down 19% over the past month and near a 52-week low, as Wall Street questions whether its heavy AI spending will pay off.
The layoffs come amid a broader wave of restructuring across the tech industry, which has shed more jobs than any other sector this year. U.S. tech companies have announced 123,653 cuts so far in 2026, up 66% from the same stretch of 2025, according to a report from outplacement firm Challenger, Gray & Christmas.
Across all sectors, not just tech, AI was the most commonly cited reason for job cuts in May — the third straight month it has led the list. The 38,579 cuts attributed to AI were the most in any month since Challenger began tracking the cause in 2023. For the year, AI has been linked to 87,714 cuts, already surpassing the 54,836 attributed to it in all of 2025.
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. 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.
Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm, on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm/.
Attorney Advertising. Prior results do not guarantee a similar outcome.
Contact Information:
Laurence Rosen, Esq.
Phillip Kim, Esq.
The Rosen Law Firm, P.A.
275 Madison Avenue, 40th Floor
New York, NY 10016
Tel: (212) 686-1060
Toll Free: (866) 767-3653
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[email protected]
www.rosenlegal.com
Microsoft CEO Satya Nadella. JASON REDMOND/AFP via Getty Images Microsoft is planning to announce job cuts soon as the tech giant continues efforts to control costs, according to people familiar with the situation.
The cuts are expected to impact thousands of roles, including sales and consulting, in addition to jobs at the Xbox gaming division, the people said.
This round will be smaller than similar layoffs last year. This time, the cuts will be less than 2.5% of the company's 220,000-person workforce, the people added. They asked not to be identified discussing sensitive matters.
The company is planning to announce the layoffs next week, although the exact timing could change. Some affected employees will be offered new roles immediately, one of the people said.
In previous years, Microsoft has sometimes cut jobs around the start of its new fiscal year on July 1. Last year, the company eliminated 6,000 roles in May and an additional 9,000 employees, or about 4% of the company's workforce, in July.
The plans underscore Microsoft's moves to rein in costs as it ramps up spending on AI. The company has also been under pressure from Wall Street over concern that AI could replace software services, including, in theory, some Microsoft offerings. The stock has slumped about 17% in the past month.
Microsoft earlier this year announced a voluntary retirement program offering buyouts to employees level 67 and below in the US who had 70 or more years of age and service. About 7% of Microsoft's 125,000 US workforce, or nearly 9,000 employees, was eligible.
About one-third of eligible employees took the buyout, in line with expectations, one of the people said. That allowed Microsoft to cut a lower percentage of its workforce compared to last year, this person added.
Sales employees with commission-based compensation were excluded from this retirement buyout offer, according to an internal document viewed by Business Insider.
Xbox layoffs have been expected since new gaming CEO Asha Sharma sent a memo to employees calling for a "reset" for this business.
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NEW YORK, June 30, 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.
Attorney advertising. Prior results do not guarantee similar outcomes.
Microsoft (NASDAQ:MSFT | MSFT Price Prediction) and Alphabet (NASDAQ:GOOG) both reported earnings on April 29, 2026. Microsoft leaned on enterprise cloud and Copilot seats. Alphabet leaned on Search resilience and a hyper-growing cloud unit. Both beat estimates. Both are spending unprecedented sums on AI infrastructure. The market has punished both anyway.
Azure Heats Up. Google Cloud Runs Even Hotter. Microsoft delivered $82.89 billion in revenue, up 18.3%, with EPS of $4.27 against a $4.09 estimate. Intelligent Cloud hit $34.68 billion, with Azure growing 40% in constant currency. That is the engine.
Satya Nadella told investors the AI business now runs at a “$37 billion ARR, up 123%” pace. Microsoft 365 Copilot now sits at over 20 million paid seats, with Accenture alone deploying 740,000 seats. Commercial RPO of $627 billion tells you the backlog is real.
Alphabet was, frankly, louder. Revenue of $109.9 billion grew 21.79%. Reported EPS of $5.11 blew past the $2.63 estimate, but a chunk came from $36.91 billion in unrealized equity gains, so I would not anchor on the headline.
The cleaner story is Google Cloud at $20.03 billion, up 63%, with backlog nearly doubling sequentially to $462 billion. Cloud operating margin expanded to 32.9% from 17.8%. Search held up too at $60.4 billion, up 19%, with queries at all-time highs.
A Partnership Model Versus a Vertical Stack Lens Microsoft Alphabet Core AI bet OpenAI partnership plus MAI models Owns silicon, Gemini, and the stack Cloud growth 40% (Azure) 63% (Google Cloud) 2026 capex plan ~$190 billion $180B to $190B Valuation (P/E) 27.2 13.9 Microsoft pays for IP rights through 2032 and is monetizing through seats that increasingly behave like meters. Nadella was explicit: “The basic transformation of any per-user business of ours…will become a per-user and usage business.”
Alphabet, meanwhile, sells Gemini, TPUs, and BigQuery as one fabric. Sundar Pichai called the company “genuinely differentiated” because of the vertically optimized stack. Enterprise AI Solutions revenue grew nearly 800% year-over-year. That figure is accurate.
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Capex Is the Stress Test Microsoft burned $30.88 billion in capex, up 84.39%, and Amy Hood guided capex over $40 billion next quarter. Alphabet spent $35.67 billion, pushing free cash flow down 46.63% to $10.12 billion.
I will keep an eye on Azure constant-currency growth holding above the 39% to 40% guide and on whether Google Cloud margins can absorb the Wiz integration. The June 23 reports of top AI developers shifting toward Anthropic and OpenAI are worth tracking too.
Why I Lean Toward Alphabet Right Now Both businesses are excellent. The price tags differ sharply. Since reporting, MSFT is down 11.94%, while GOOG is down just 3.57%.
Alphabet trades at a lower multiple, with cloud accelerating and Waymo doing 500,000+ autonomous rides per week. That is the asymmetric setup I want.
Microsoft remains the steadier compounder, with a fortress backlog and predictable enterprise renewals. For investors sensitive to volatility, capex clarity from both companies remains a key gating factor. I am willing to sit through the noise at Alphabet’s multiple.
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Key Takeaways Microsoft is on track for its worst month since 2000 after a 20% June decline and AI spending concerns. MSFT plans $190B in capital spending through 2026, raising investor worries over profit margins. ETFs like VGT provide diversified tech exposure with Microsoft among their top holdings. According to recent data published by Bloomberg, Microsoft (MSFT - Free Report) is heading for its worst month since the dot-com era. The stock has lost 20% so far in June, putting it on course for its steepest monthly decline since December 2000, when it lost 24.4%.
While this brutal selloff, which erased more than $570 billion in this software giant’s market value, may have deeply disappointed near-term investors, some may view this as a compelling dip-buying opportunity.
Rather than betting on a single stock and losing havoc with its sudden freefall as it happened with MSFT, gaining exposure to tech exchange-traded funds (ETFs) holding Microsoft alongside other silicon giants may offer a more prudent strategy.
Before identifying those ETFs, it is important to understand what caused Microsoft's decline, whether it is well positioned to regain its momentum over the long term, and why tech ETFs may offer a more diversified and potentially safer investment strategy.
What Caused Microsoft’s Freefall?The recent slump witnessed in Microsoft's share price stems primarily from growing investor skepticism surrounding its massive artificial intelligence (AI) expenditures, with the company announcing during its fiscal third-quarter results that it expects $190 billion in capital expenditures through the end of 2026.
This expense plan by Microsoft, which exceeded Wall Street expectations, made investors increasingly anxious about how long it will take for multi-billion-dollar infrastructure investments to translate into robust profit margins.
Market experts have also expressed concern about margin compression in MSFT’s Azure cloud-computing business. Although Azure remains the company's fastest-growing segment, operating AI infrastructure is generating significantly lower gross margins than Microsoft's traditional on-premises software business.
Consequently, anxiety among investors has been building up over the past few months, leading to repeated sell-offs in MSFT's shares and a cumulative year-to-date decline of approximately 24%.
Will MSFT Rebound?Looking at historical data and underlying valuations, Microsoft's long-term growth prospects remain healthy. The company's forward price-to-earnings (P/E) ratio sits at a premium of around 19.1X compared to its peer group’s 15.68X, which, while high, is justified by its dominant enterprise footprint and expanding cloud ecosystem.
The stock boasts a four-quarter average earnings surprise of 8.43% and a long-term (three-to-five years) earnings growth rate of 16.60%, which beat the industry’s growth rate of 12.40%.
The Zacks Consensus Estimate for MSFT’s fiscal 2026 and 2027 revenues implies year-over-year growth of 17% and 16%, respectively.
Microsoft's fundamental ability to monetize generative AI through its Azure platform and increased GitHub Copilot usage should help it achieve these targets, thereby positioning it to make a solid rebound in the long term.
The stock’s short-term average price target of $554.04 reflects an increase of 48.55% from its last closing price of $372.97, implying a substantial upside from its current discounted price.
The Rationale Behind Choosing Tech ETFsEven with Microsoft's solid potential for recovery, as mentioned above, some investors may remain skeptical given the recent downturn. For these cautious market participants, tech ETFs represent an excellent investment alternative.
From a diversification standpoint, ETFs help mitigate the single-stock risk associated with holding an individual company, reducing the impact of earnings-related volatility. Rapid AI acceleration is already boosting the broader tech industry to unprecedented heights.
Although the tech sector has witnessed notable macro sell-offs recently, the ultimate long-term potential of the industry remains robust, thanks to secular tailwinds like enterprise cloud migration, cybersecurity expansion, and advanced semiconductor manufacturing. Thus, capitalizing on this broad momentum via tech ETFs allows investors to participate in the AI revolution without exposing their portfolios to the vulnerability of a single corporate balance sheet.
Tech ETFs to BuyWith AI infrastructure spending from major hyperscalers expected to reach approximately $725 billion in 2026, one may consider the following tech ETFs to buy on this historic Microsoft dip:
Vanguard Information Technology Index Fund ETF Shares (VGT - Free Report)
This fund, with net assets worth $170.1 billion, offers exposure to 323 companies from the following industries: technology software and services, technology hardware and equipment, and semiconductor and semiconductor equipment manufacturers. NVIDIA (NVDA - Free Report) holds the first spot in this fund, with 16.77% weightage, while MSFT holds the third spot with 9.87% weightage.
VGT has rallied 23.6% year to date. The fund charges 9 basis points (bps) as fees and traded at a good volume of 4.46 million shares in the last trading session. It sports a Zacks ETF Rank #1 (Strong Buy).
Fidelity MSCI Information Technology Index ETF (FTEC - Free Report)
This fund, with net assets worth $21.38 billion, offers exposure to 287 information technology stocks. NVDA holds the first spot in this fund, with 16.73% weightage, while MSFT holds the third spot with 9.40% weightage.
FTEC has rallied 23.9% year to date. The fund charges 8 bps as fees and traded at a volume of 0.26 million shares in the last trading session. It sports a Zacks ETF Rank #1.
State Street Technology Select Sector SPDR ETF (XLK - Free Report)
This fund, with assets under management (AUM) worth $120.67 billion, offers exposure to 74 companies from technology hardware, storage and peripherals; software; communications equipment; semiconductors and semiconductor equipment; IT services; and electronic equipment, instruments and components industries. NVDA holds the first spot in this fund, with 14.80% weightage, while MSFT holds the third spot with 8.79% weightage.
XLK has surged 28.8% year to date. The fund charges 8 bps as fees and traded at a good volume of 11.85 million shares in the last trading session. It sports a Zacks ETF Rank #1.
iShares U.S. Technology ETF (IYW - Free Report)
This fund, with net assets worth $24.80 billion, offers exposure to 148 software, semiconductors, and tech hardware companies in the United States. NVDA holds the first spot in this fund, with 12.94% weightage, while MSFT holds the third spot with 8.48% weightage.
IYW has risen 23.3% year to date. The fund charges 38 bps as fees and traded at a volume of 0.48 million shares in the last trading session. It sports a Zacks ETF Rank #1.
There's more than one way to invest successfully. In fact, strategic differentiation may be necessary to outperform the market. The most successful investors all have unique strategies and characteristics that separate their portfolios from the rest of the pack.
Nonetheless, you can still find some commonalities among billionaire portfolio managers that lead them to make similar investments at times. For example, Bill Ackman, Jeremy Grantham, and Cliff Asness all made substantial investments in the same stock last quarter. And investors currently have an opportunity to pick up shares at an even better price than what the billionaire fund managers may have paid earlier this year.
Here's why Microsoft (MSFT +1.07%) fits into each billionaire's portfolio and why the stock still looks severely undervalued today.
Image source: Getty Images.
Long-term investors seeking value in today's market Ackman, Grantham, and Asness are all titans in the investment management space. Ackman runs Pershing Square, Grantham is the G in GMO, and Asness founded AQR Capital Management. They each disclosed substantial increases in Microsoft in their most recent quarterly filings with the Securities and Exchange Commission (SEC).
Pershing Square Capital Management bought about $2 billion worth of the stock, making it one of the fund's biggest positions. Ackman also disclosed purchasing the stock for his new fund, Pershing Square USA. GMO bought over 900,000 shares of Microsoft in the first quarter, making it the fund's top holding. AQR increased its stake in Microsoft by 60%, pushing it to become its second-largest position. Ackman, Grantham, and Asness are all focused on long-term horizons in their investing, and they typically pay close attention to valuation.
Ackman prefers to concentrate on intrinsic value, buying stocks with durable competitive advantages when the market offers a good price. Ackman noted Microsoft's leadership in cloud computing and enterprise software as reasons for his purchase.
Grantham prefers companies with strong recurring cash flow and tries to avoid cyclicality. He's best known for warning against bubbles and harnessing the power of mean reversion. While Microsoft is heavily tied to the much-hyped artificial intelligence (AI) trade, Grantham may still see value in the company thanks to its strong cash-flow generation.
Asness uses quantitative models that balance value and momentum investing as well as several other factors. That makes his portfolio much more systematic rather than fully based on fundamental analysis. Microsoft likely fills the role of a high-quality stock trading at a great value relative to its durable earnings growth.
Today's Change
(
1.07
%) $
3.94
Current Price
$
372.51
Investors are getting a great opportunity to follow these billionaires From a long-term fundamentals standpoint, Microsoft appears severely undervalued by the market. The stock currently trades at its lowest level since the start of 2024 despite strong revenue growth across both its cloud computing and enterprise software segments.
Azure, the cloud computing business, generated 40% revenue growth last quarter. Management expects that rate to accelerate in the back half of the year. That's supported by a massive backlog of $627 billion in contracted revenue, with about 25% expected to be recognized over the next 12 months.
Meanwhile, Microsoft's enterprise software segment, which includes Microsoft 365 and Dynamics 365, posted 17% year-over-year revenue growth last quarter. That was driven by the commercial adoption of its Copilot AI assistant and higher consumer prices. The former still has a long way to go as Microsoft pushes to make Copilot a standard addition to Microsoft 365 and its 450 million users. It currently counts just 20 million paid commercial Copilot users.
Microsoft should be able to grow revenue at a solid double-digit pace for the foreseeable future as demand for its cloud compute grows and it sells more Copilot subscriptions. Both should ultimately lead to improved operating margins even though the company already operates at a relatively high margin. With the stock trading for just 21 times earnings, it seems an absolute bargain at today's price. It's no wonder it's caught the eye of several of the top fund managers in the world.
Key Takeaways Microsoft added Mphasis to MISA, expanding its partner-led security ecosystem and Marketplace presence.Microsoft Build unveiled new AI security tools, including MDASH and Microsoft Agent 365 integrations.MSFT reported 18% revenue growth as cloud, Azure and security-enabled Microsoft 365 adoption accelerated. Microsoft Corporation (MSFT - Free Report) continues to deepen its cybersecurity ecosystem, with IT solutions provider Mphasis joining the Microsoft Intelligent Security Association (MISA), building on an existing collaboration centered on Microsoft Sentinel, Entra, Intune, Purview, Defender and Microsoft 365 Copilot. Mphasis' managed security services are already listed on Microsoft Marketplace, reinforcing the company's strategy of expanding its security footprint through a growing partner ecosystem rather than organic development alone. The move follows a string of security-focused announcements at Microsoft Build in early June 2026, including the limited preview of "Codename MDASH," an agentic vulnerability-detection capability that pairs Microsoft Defender with GitHub Code Security and new integrations within Microsoft Agent 365 aimed at securing AI agents and identities.
These developments arrive against a backdrop of strong underlying financial momentum. In its fiscal third-quarter 2026 results, reported April 29, 2026, Microsoft posted total revenues of $82.9 billion, up 18% year over year, with Intelligent Cloud revenues rising 30% to $34.7 billion and Azure growth accelerating to 40%. Management noted that Microsoft 365 Commercial cloud revenues grew 19%, helped by the adoption of Microsoft 365 E5 and Copilot, both of which bundle security and compliance capabilities. The company’s security stack now processes 100 trillion daily signals, and Microsoft Entra has surpassed one billion monthly active users, underscoring the scale at which the security business now operates alongside cloud and productivity.
The picture is not without risk. Security still rides on the broader AI infrastructure buildout, where capital expenditure remains elevated and gross margins have come under pressure from compute investment. Execution also depends on converting partner integrations like Mphasis into measurable seat and consumption growth rather than announcements alone. Nonetheless, the combination of accelerating cloud growth, expanding partner reach and steady product releases suggests Microsoft's security business is moving from a supporting feature toward a more distinct growth contributor within its broader portfolio.
Competitive Landscape: CrowdStrike and Palo Alto NetworksMicrosoft's security expansion plays out alongside two established U.S.-listed rivals, CrowdStrike (CRWD - Free Report) and Palo Alto Networks (PANW - Free Report) , both pursuing platform consolidation strategies of their own. CrowdStrike has built its identity around the cloud-native Falcon platform, leaning on endpoint and identity protection, while Palo Alto Networks has pursued an acquisition-driven path toward a unified security operating model spanning network, cloud and AI-driven detection. Unlike Microsoft, neither CrowdStrike nor Palo Alto Networks can pair security with a dominant productivity or hyperscale cloud franchise, leaving bundling and cross-selling as Microsoft's structural advantage even as CrowdStrike and Palo Alto Networks continue to compete aggressively on specialized capability and platform depth.
MSFT’s Share Price Performance, Valuation & EstimatesMSFT shares have lost 23.7% in the past six-month period compared with the Zacks Computer – Software industry’s decline of 25.3%. The Zacks Computer and Technology sector has appreciated 15.8% in the same time frame.
MSFT’s 6-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MSFT stock appears overvalued, trading at a forward 12-month price/earnings ratio of 19.11X, higher than the industry’s 18.83X. MSFT has a Value Score of C.
MSFT’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MSFT’s fiscal 2026 earnings is pegged at $17.33 per share. The estimate indicates 27.05% year-over-year growth.
Microsoft currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
, /PRNewswire/ -- The Law Offices of Howard G. Smith announces that investors with substantial losses have opportunity to lead the securities fraud class action lawsuit against Microsoft Corporation ("Microsoft" or the "Company") (NASDAQ: MSFT).
IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN MICROSOFT CORPORATION (MSFT), CONTACT THE LAW OFFICES OF HOWARD G. SMITH BEFORE AUGUST 11, 2026 (LEAD PLAINTIFF DEADLINE) TO PARTICIPATE IN THE ONGOING SECURITIES FRAUD LAWSUIT.
Contact the Law Offices of Howard G. Smith to discuss your legal rights by email at [email protected], by telephone at (215) 638-4847 or visit our website at www.howardsmithlaw.com.
What Is The Lawsuit About?
The complaint filed alleges that, between May 1, 2025 and January 28, 2026, 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.
Contact Us To Participate or Learn More:
If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact:
Howard G. Smith, Esq.,
Law Offices of Howard G. Smith,
3070 Bristol Pike, Suite 112,
Bensalem, Pennsylvania 19020,
Call us at: (215) 638-4847
Email us at: [email protected],
Visit our website at: www.howardsmithlaw.com.
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:
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
215-638-4847
[email protected]
www.howardsmithlaw.com
My buy order on Microsoft (NASDAQ:MSFT | MSFT Price Prediction) has fired five times this year, and the sixth sits queued for Monday morning. The stock is down. The headlines are nervous. I keep adding, and I am writing this to explain exactly why.
What pulls me back is simple. Microsoft sits at the center of the agentic computing era with the balance sheet, the contracted customers, and the cash flow to fund the buildout without flinching. Satya Nadella runs it like an owner. The numbers behind that sentence are the reason I cannot stop hitting buy.
The Backlog Tells Me What Happens Next Reason one is contracted revenue. Commercial remaining performance obligations reached $627 billion in Q3 FY2026, a figure that nearly doubled year over year. CFO Amy Hood noted weighted average duration of approximately two and a half years, with roughly 25% recognized in revenue in the next twelve months, up 39% year over year. That is multi-year visibility most companies would trade a kidney for.
Reason two is the AI engine. The AI business crossed an annual revenue run rate of $37 billion, up 123% year-over-year. Azure grew 40%. Microsoft Cloud revenue hit $54.5 billion, up 29%. The restructured OpenAI partnership carries Microsoft’s stake at roughly 27%, worth around $135 billion, plus a contracted $250 billion of incremental Azure spend and IP rights extended through 2032, including post-AGI models.
Reason three is the quality of the cash. Operating margin sits at 45.62%. Return on equity is 33.28%. Operating cash flow in Q3 alone was $46.68 billion, up 26.01%. The balance sheet holds $32.11 billion in cash against debt-to-equity of 0.176 and interest coverage of 53.89x. This is a fortress paying for its own growth.
The Valuation I Am Buying Into Price did the work for me. Shares closed at $372.97, down 22.54% year to date. Forward P/E sits at 19x. Trailing P/E is 22x. PEG is 1.15 against quarterly earnings growth of 23.4%. EPS came in at $4.27 versus $4.07 consensus, the fourth straight beat. I am paying a reasonable multiple for a business compounding earnings in the low twenties.
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The Risk I Will Not Pretend Away Capex hit $30.88 billion in one quarter, up 84.39% year over year. If AI demand softens before this infrastructure earns its return, margins compress and the bear case lands hard. OpenAI investment losses already swung to $3.1 billion in Q1 FY2026 versus $523 million a year earlier. Reddit’s loudest bears called it capital incineration in a thread titled “Satya and Zuckerberg are incinerating capital” that drew over a thousand upvotes.
I read that thread. Then I read Amy Hood’s reminder that much of the capital we’re spending today and the GPUs we’re buying are already contracted for most of their useful life. The capex is pre-sold. That changes the calculus, and it is why the buildout does not scare me out of the position.
Why The Buy Button Stays Live The dividend yield is modest at 0.87%, with the next ex-dividend date on August 20, 2026. The payout is a bonus.
I own this stock because contracted revenue, cloud growth, and pricing power are compounding through one of the largest infrastructure transitions in software history. Of 55 analysts covering the name, 52 rate it buy or strong buy with zero sells. I am buying alongside them, and I will keep buying until the thesis breaks.
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I think a little bit of a dip in these stocks could offer value for many traders out there.
Amazon is a little bit soft in pre-market trading, and it looks much like a stock that is probably going to continue to consolidate right around the 200-day EMA. This isn’t to say that I’m bearish on the market; it’s just that it’s worth noting we gave back a lot during the Monday session.
So, I think we’ve got some work to do here before we can turn things around and really get moving. We’ll just have to wait and see how that plays out. I think a little bit of a dip could be a buying opportunity for longer-term-minded investors.
MSFT Technical Analysis The Microsoft market looks like it’s basically going to open up about where it closed. I think we’re still in the middle of trying to sort out whether or not this is a double bottom that we’re forming. I think if we can break above the $385 level, it’s a good sign. At that point in time, I’d become a lot more interested in Microsoft because I think it has quite a bit of room to run.
If we turn around and fall from here, I’d be looking to see whether or not we can hold the $350 level as support. That could be a nice little buying opportunity as well.
AAPL Technical Analysis Apple looks a little bit soft. I still think the $275 level offers support as well, though. We have the 50-day EMA above at the $290 level roughly, which is in the middle of a gap. I think that’s our ceiling.
I would expect a little bit of sideways action here, probably over the next several days, as we determine the next move for Apple, which, of course, is owned far and wide by institutions, so I do tend to favor the upside over the longer term.
If you’d like to know more about technical analysis and how traders use it, please visit our educational area.
Microsoft (NASDAQ:MSFT | MSFT Price Prediction) has been brutalized in 2026, down 26.72% year to date and 7% in the past week alone, even as fundamentals accelerate.
With shares at $352.83 heading into the final trading days of June 2026, the question is whether this is capitulation or the start of something worse. Our model says capitulation, and the setup over the next 12 months looks asymmetric to the upside.
The 24/7 Wall St. Price Target for Microsoft Our 24/7 Wall St. price target for Microsoft is $478.99 over the next 12 months, implying 35.76% upside from current levels. We rate MSFT a buy with 90% confidence. Prediction markets imply 67.5% probability that MSFT finishes this week near $350 and 76.6% probability of closing above $345 at month end.
Metric Value Current Price $352.83 24/7 Wall St. Price Target $478.99 Upside 35.76% Recommendation BUY Confidence Level 90% A Selloff That Has Outrun the Fundamentals MSFT is off 27.75% over the past year and 15.19% in the last month, with shares falling 3.46% on June 25 alone.
Yet the Q3 FY26 earnings report showed the fourth consecutive EPS beat: $4.27 EPS on revenue of $82.89 billion (+18.3% YoY). Azure grew 40%, the AI business crossed a $37 billion annual run rate (+123% YoY), and commercial RPO ballooned to $627 billion, nearly double the prior year.
The bear story centers on capex. Q3 capital expenditures hit $30.88 billion, up 84.39% YoY, and a viral r/wallstreetbets post titled “Satya and Zuckerberg are incinerating capital” drew over 1,000 upvotes. That tension between earnings growth and infrastructure spend explains the selloff better than any deterioration in the business.
The Case for $599 and Beyond Our bull case price is $599.22, or 69.83% upside. Microsoft Cloud reached $54.5 billion in quarterly revenue growing 29%, and the restructured OpenAI partnership extended Microsoft’s IP rights through 2032 and locked in a $250 billion incremental Azure commitment from OpenAI.
With analyst consensus at 52 buy ratings, 3 hold, 0 sell and a Street target of $561.39, even partial rerating to historical multiples gets shares back near $500. One r/stocks post noted “Microsoft is now cheaper than the April 2025 Tariff crash, yet TTM EPS is up 30%”.
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What Could Drag Shares to $431 Our bear case lands at $431.28, still 22.23% above the current quote, showing how much pessimism is already priced in. Capex doubled, OpenAI investment losses widened to $3.1 billion in Q1 FY26, and insiders have been net sellers across 33 recent transactions.
Bulls counter that capex funds the RPO backlog that grew 99%, and OpenAI losses are paper marks against a stake Microsoft values near $135 billion.
Microsoft Price Prediction 2026-2030 The 24/7 Wall St. price target of $478.99 reflects a buy with 90% confidence. The disconnect between a 22x forward multiple and 123% AI growth on a $37 billion run rate tips the scales.
The model favors accumulation on a 12-month horizon, with tolerance for capex-driven volatility built into the thesis. The thesis weakens if FY27 Azure growth decelerates below 30% or commercial RPO conversion slows materially.
Our model projects Microsoft could trade as follows, assuming current growth and AI monetization trajectories hold.
Year 24/7 Wall St. Price Target 2026 $405 2027 $478.99 2028 $575 2029 $695 2030 $835 These projections assume Microsoft sustains Azure and Microsoft 365 growth while capex returns on AI infrastructure begin flowing through to operating margins. Material upside could come from agentic computing monetization at scale; downside risk centers on sustained AI capex overbuild without commensurate revenue conversion.
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A Microsoft sign is displayed outside the Microsoft Germany headquarters in Munich, Bavaria, Germany, on May 22, 2026. Microsoft develops software, cloud computing services, computer hardware, consumer electronics, video games, business applications, and digital platforms including Windows, Microsoft 365, Azure, Teams, Xbox, LinkedIn, GitHub, OneDrive, Outlook, and Dynamics 365. (Photo by Michael Nguyen/NurPhoto via Getty Images)
NurPhoto via Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
The technology behemoth is reporting unprecedented results, primarily fueled by its cloud and AI sectors, but the choice to invest relies on whether you believe its significant investment in the future will yield returns.
Microsoft (MSFT) has emerged as a wager on the future of AI, even though its shares have faced challenges this year, declining by 23.6% and trading roughly 31% below its peak over the past 52 weeks. This decrease in stock price stands in stark contrast to the company’s operational performance, which recently reported a “record third quarter” supported by its resilient cloud segment. For investors, the stock's decline offers both an opportunity to invest in a transformational growth narrative and a caution regarding the significant expenses associated with building that future.
What You Are Paying ForWhen assessing Microsoft’s valuation, a mixed signal emerges that captures this tension. On a price-to-earnings basis, the stock trades at a multiple of 20.9, which is indeed lower than the S&P 500 average of 24.4. However, when looking at the price-to-sales ratio, the narrative shifts, as it stands at 8.2—over double the market’s 3.3. This isn't a contradiction; it reflects the market's numerical verdict. You are paying a high premium for each dollar of Microsoft’s revenue, banking on its substantial AI investments to foster a significantly larger and faster-growing sales stream in the future. Concurrently, you are receiving a discount on present profits, reflecting the reality that developing this AI infrastructure is currently squeezing margins.
What You Receive In ReturnWhat you obtain is a company operating optimally, focused on the crucial segment: Microsoft Cloud. That division's revenue surpassed $54 billion in the latest quarter, marking a 29% increase year-over-year. The driving force behind that cloud is AI, which management indicates has exceeded a $37 billion annual revenue run rate, up by 123%. The firm’s strategy is straightforward: construct the leading AI infrastructure globally while developing “high-value agentic systems” like its Copilot assistants for coding, security, and productivity. Adoption rates are evident, with more than 20 million active subscriptions for Microsoft 365 Copilot. The company is well-positioned to finance this ambitious expansion, generating approximately $170.1 billion in operating cash flow, while its debt is a mere 2.2% of its market capitalization—a small fraction compared to the 20.8% for the typical S&P 500 firm.
What Occurs During A Market DownturnHistorically, for a corporation of its magnitude, Microsoft’s stock has shown resilience during market downturns, maintaining proximity to the broader index. During the inflation crisis of 2022, it decreased by 38% while the S&P 500 fell 25%. Contrarily, in the market crash of 2020 linked to the pandemic, it performed better, declining by 28% compared to the market's 34% downturn. Reflecting back to the 2008 global financial crisis, it closely followed the market, dropping 59% versus the S&P 500’s fall of 57%. Collectively, its historical performance implies that during a significant market decline, one can expect it to behave comparably to the S&P 500, both in terms of extent of decline and recovery trajectory.
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Bringing It All TogetherThe choice to acquire Microsoft stock today ultimately hinges on your belief in the company’s capital strategy. The firm occupies a pivotal position in a technological transition, with management forecasting “another year of double-digit growth in revenue and operating income.” However, the sheer scale of that investment raises concerns among investors. The company anticipates “investing around $190 billion in capital expenditures” in calendar year 2026, a figure that has prompted one analyst to describe it as “a bit of a disconnect that makes investors slightly anxious.” Currently, the sole metric that truly matters is whether the swift uptake of its AI technologies can generate sufficient revenue growth to fund that vision.
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LOS ANGELES, June 30, 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.
CONTACT:
The Schall Law Firm
Brian Schall, Esq.,
www.schallfirm.com
Office: 310-301-3335 [email protected]
Trade tensions appeared to cool after the U.S. and European Union reached a trade agreement capping most EU exports to the U.S. with a 15% tariff ceiling. For investors, that looked like a welcome step toward greater certainty after months of tariff negotiations.
Yet trade policy rarely stays settled for long. President Trump has now opened a new front in the global trade debate by targeting digital services taxes, or DSTs, arguing they unfairly single out America’s largest technology companies. That shifts the conversation from steel, automobiles, and consumer goods to software, online advertising, cloud computing, and e-commerce.
Digital Taxes Put Big Tech In the Spotlight Unlike traditional corporate income taxes, digital services taxes target revenue generated from digital platforms rather than profits. According to the Tax Foundation, roughly half of European countries are discussing, proposing, or have already implemented some form of DST aimed largely at multinational technology companies.
The U.K. has imposed a 2% digital services tax since 2020 on revenues generated by search engines, social media companies, and online marketplaces that derive value from U.K. users. France, Italy, Spain, Austria, and Canada have enacted similar measures, according to the Tax Foundation and each country’s finance ministry.
Trump has made clear he views those taxes as discriminatory. In a Truth Social post, he said any country imposing a digital services tax on U.S. companies would face a 100% tariff on all goods exported to the U.S.. Earlier this month, he warned France that its wine and champagne would face a 100% tariff if it moved forward with expanding its digital tax regime.
The Legal Battle Over Tariffs Isn’t Over The White House also faces legal questions over how such tariffs would be implemented.
Last year, the Supreme Court struck down Trump’s reciprocal tariff framework that relied on the International Emergency Economic Powers Act, limiting the administration’s ability to impose broad tariffs under emergency powers. In response, Trump immediately invoked Section 122 of the Trade Act of 1974 to establish a new 10% global tariff.
That authority comes with an important limitation. Section 122 tariffs can remain in place for only 150 days unless Congress approves an extension. That means any long-term tariff campaign tied to digital services taxes could require either new legal authority or congressional support.
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Granted, legal uncertainty doesn’t necessarily prevent markets from reacting. Investors often price in policy risk long before courts or lawmakers reach a final decision.
These Tech Giants Have the Most at Stake Digital services taxes primarily affect companies generating large amounts of advertising, marketplace, software, or cloud revenue across Europe. These five are the most exposed:
Company Primary exposure to DSTs Alphabet (NASDAQ:GOOG | GOOG Price Prediction) Google Search and YouTube advertising throughout Europe Amazon (NASDAQ:AMZN) Marketplace commissions and seller fees, particularly in the U.K. and France Apple (NASDAQ:AAPL) App Store commissions and broader European consumer exposure if retaliation expands Meta Platforms (NASDAQ:META) European and U.K. advertising revenue from Facebook and Instagram Microsoft (NASDAQ:MSFT) Azure cloud services, enterprise software, and digital subscriptions The largest beneficiaries of eliminating DSTs would likely be Meta and Alphabet because advertising revenue forms the core of both companies’ business models. Amazon’s marketplace business also faces direct exposure, while Apple’s App Store commissions fall within many governments’ definition of taxable digital services. Microsoft faces less direct exposure but still generates billions in European cloud and software revenue.
That said, investors should also consider the other side of the equation. If Europe retaliates against U.S. tariffs with new taxes or import restrictions, companies like Apple and Amazon could face pressure on their broader international operations.
Key Takeaway The latest tariff threat suggests trade tensions are evolving rather than disappearing. The U.S.-EU agreement lowered uncertainty for traditional goods by establishing a 15% tariff ceiling, but digital services taxes have emerged as the next battleground.
For investors, the companies to watch remain Meta, Alphabet, Amazon, Apple, and Microsoft because each generates meaningful revenue from European digital markets. Regardless of whether the administration ultimately has the legal authority to impose lasting 100% tariffs, policy headlines alone can move markets. Smart investors should pay as much attention to Washington and Brussels as they do quarterly earnings over the coming months.
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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.
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.
Jed Ellerbroek talks about the latest market moves in the tech sector, highlighting companies Meta Platforms (META), Microsoft (MSFT), Alphabet (GOOGL) and Amazon (AMZN). He says these firms are generating strong returns on their data center investments and are well positioned for continued performance.
New York, New York--(Newsfile Corp. - June 29, 2026) - 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.
Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm, on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm/.
Attorney Advertising. Prior results do not guarantee a similar outcome.
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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/303292
Source: The Rosen Law Firm PA
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