Why not all semiconductor firms are benefitting from the AI boom like Nvidia has
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 02 2024
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Should l Buy MSFT?
Source: Newsfilter
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 401.140
Low
500.00
Averages
631.36
High
678.00
Current: 401.140
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Microsoft's Azure Cloud Business Continues Impressive Growth
- Azure Revenue Growth: Microsoft's Azure cloud computing business has achieved a year-over-year growth rate of 39%, indicating strong demand for its computing resources, which further solidifies Microsoft's market position in the AI era and is expected to drive future revenue growth.
- Strong Overall Performance: Microsoft's total revenue increased by 17% year-over-year to $81.3 billion, with its Productivity and Business Processes division growing by 16% and consumer cloud revenue rising by 29%, demonstrating excellent performance across its customer base and the positive impact of AI feature integration on business growth.
- Opportunity in OpenAI Investment: Microsoft holds a 27% stake in OpenAI, and while OpenAI's contribution to Microsoft's overall business is limited, investing in Microsoft provides indirect exposure to generative AI, enhancing the attractiveness of Microsoft stock for investors.
- Attractive Valuation for Investment: Microsoft's current operating price-to-earnings ratio is near its lowest levels since 2020, and despite trading at a premium in the past, this valuation correction presents a compelling buying opportunity for investors, with significant upside potential expected over the next few years.
See More
OpenAI's ChatGPT Sees Over 10% Monthly Growth
- Significant User Growth: OpenAI CEO Sam Altman revealed in an internal message that ChatGPT is experiencing over 10% monthly growth, with approximately 800 million weekly active users, demonstrating strong appeal despite fierce competition in the market.
- Product Update Plans: Altman also mentioned that OpenAI plans to release an updated chat model this week, and its AI coding tool Codex has grown by about 50% in the past week, which will further enhance its product competitiveness.
- Ad Testing Launch: OpenAI is set to begin testing ads in ChatGPT today, facing criticism from competitor Anthropic; Altman emphasized the goal of making AI accessible to a broad user base that cannot afford subscription fees.
- Market Valuation Surge: OpenAI's valuation is expected to soar above $800 billion, while Anthropic's latest funding round could elevate its valuation to $350 billion, indicating strong growth potential for both companies in the AI sector.
See More
Microsoft Stock Decline Approaches $3 Trillion Market Cap
- Stock Decline: Microsoft has seen its stock drop over 10% at the start of 2026, nearing a $3 trillion market cap, which would symbolize a significant decline for a normally stable stock, reflecting investor concerns about future growth.
- Earnings Report Disappointment: Although Microsoft's second-quarter revenue reached $81.3 billion, a 17% year-over-year increase, the cloud business Azure's growth rate of 39% fell short of analyst expectations, indicating potential slowdowns that could shake investor confidence.
- AI Business Potential: CEO Satya Nadella highlighted the rapid growth of Microsoft's AI business, which has become larger than some of its major franchises, suggesting that despite the slowdown in cloud growth, there are still significant opportunities in AI that could drive future growth.
- Investment Opportunity: Following the post-earnings sell-off, Microsoft's stock has dropped to levels not seen since April of last year, and while it is down about 20% over the past six months, this may present a compelling buying opportunity for long-term investors, especially given its attractive valuation relative to the S&P 500 and the growth potential in AI.
See More
Japan's Prime Minister Victory Fuels Stock Market Surge
- Election Impact: Japan's Prime Minister Sanae Takaichi's landslide election victory has led to expectations that her economic policies will boost the stock market and weaken the yen, favoring looser monetary policy and increased government spending.
- Strong Market Performance: Following the election, Japanese stocks hit record highs, with gains extending into the following days, reflecting investor optimism about the ruling party's victory and confidence in future economic growth.
- Tech Stock Rebound: The U.S. markets also benefited, with Oracle shares rising 9.6% and Microsoft up 3.1%, contributing to a 0.47% increase in the S&P 500 and a 0.9% rise in the Nasdaq Composite, indicating a robust recovery in tech stocks.
- Alphabet's Financing Plan: Despite warnings of potential excess capacity in data centers, Alphabet plans to raise $20 billion through a bond sale, including a 100-year bond, demonstrating the company's confidence in long-term investments.
See More
S&P Lowers China Property Sales Forecast
- Property Sales Forecast Cut: S&P Global Ratings has lowered its forecast for China's property sales in 2026 to a decline of 10% to 14%, worse than the previous estimate of 5% to 8%, indicating persistent market weakness that could increase financial pressure on related companies.
- Fuel Shortage for Airlines: Cuba has announced that international airlines can no longer refuel on the island due to fuel shortages, which may impact tourism and international flight operations, exacerbating the economic challenges faced by the country.
- Novo Nordisk Lawsuit: Novo Nordisk has sued Hims & Hers for mass marketing unapproved copies of its Wegovy obesity drug in the U.S., leading to a 16% drop in Hims & Hers shares on Monday, highlighting the pharmaceutical industry's focus on intellectual property and intense market competition.
- U.S. Market Performance: The S&P 500 rose 0.47% on Monday, marking back-to-back gains, with other major U.S. indexes also climbing, reflecting improved market sentiment despite ongoing concerns regarding capital expenditures and financing among Big Tech companies.
See More
Provident Investment Management Fully Exits Maplebear Stake
- Complete Exit: On February 4, 2026, Provident Investment Management liquidated its entire stake in Maplebear by selling 489,560 shares for approximately $18 million, indicating a complete exit and reflecting a pessimistic outlook on the company's future prospects.
- Significant Price Decline: As of February 3, 2026, Maplebear's stock was priced at $36.08, down 25% over the past year, significantly lagging the S&P 500 by 40.4 percentage points, highlighting the pressure it faces in a competitive market.
- Slowing Revenue Growth: The company's revenue growth rate has decreased from 19% in 2023 to 11% in 2024, further slowing to 10% in the first three quarters of 2025, indicating a diminished market appeal amid competition from Amazon and Kroger.
- Cautious Investor Sentiment: While Maplebear's net income grew by 18% over the trailing twelve months and it trades at a P/E ratio of 20 with a forward P/E around 9, investors may prefer more competitive delivery stocks like Kroger, Uber, and DoorDash, making Provident's decision to sell more understandable.
See More
Microsoft's Azure Cloud Business Continues Impressive Growth
- Azure Revenue Growth: Microsoft's Azure cloud computing business has achieved a year-over-year growth rate of 39%, indicating strong demand for its computing resources, which further solidifies Microsoft's market position in the AI era and is expected to drive future revenue growth.
- Strong Overall Performance: Microsoft's total revenue increased by 17% year-over-year to $81.3 billion, with its Productivity and Business Processes division growing by 16% and consumer cloud revenue rising by 29%, demonstrating excellent performance across its customer base and the positive impact of AI feature integration on business growth.
- Opportunity in OpenAI Investment: Microsoft holds a 27% stake in OpenAI, and while OpenAI's contribution to Microsoft's overall business is limited, investing in Microsoft provides indirect exposure to generative AI, enhancing the attractiveness of Microsoft stock for investors.
- Attractive Valuation for Investment: Microsoft's current operating price-to-earnings ratio is near its lowest levels since 2020, and despite trading at a premium in the past, this valuation correction presents a compelling buying opportunity for investors, with significant upside potential expected over the next few years.
See More
OpenAI's ChatGPT Sees Over 10% Monthly Growth
- Significant User Growth: OpenAI CEO Sam Altman revealed in an internal message that ChatGPT is experiencing over 10% monthly growth, with approximately 800 million weekly active users, demonstrating strong appeal despite fierce competition in the market.
- Product Update Plans: Altman also mentioned that OpenAI plans to release an updated chat model this week, and its AI coding tool Codex has grown by about 50% in the past week, which will further enhance its product competitiveness.
- Ad Testing Launch: OpenAI is set to begin testing ads in ChatGPT today, facing criticism from competitor Anthropic; Altman emphasized the goal of making AI accessible to a broad user base that cannot afford subscription fees.
- Market Valuation Surge: OpenAI's valuation is expected to soar above $800 billion, while Anthropic's latest funding round could elevate its valuation to $350 billion, indicating strong growth potential for both companies in the AI sector.
See More
Microsoft Stock Decline Approaches $3 Trillion Market Cap
- Stock Decline: Microsoft has seen its stock drop over 10% at the start of 2026, nearing a $3 trillion market cap, which would symbolize a significant decline for a normally stable stock, reflecting investor concerns about future growth.
- Earnings Report Disappointment: Although Microsoft's second-quarter revenue reached $81.3 billion, a 17% year-over-year increase, the cloud business Azure's growth rate of 39% fell short of analyst expectations, indicating potential slowdowns that could shake investor confidence.
- AI Business Potential: CEO Satya Nadella highlighted the rapid growth of Microsoft's AI business, which has become larger than some of its major franchises, suggesting that despite the slowdown in cloud growth, there are still significant opportunities in AI that could drive future growth.
- Investment Opportunity: Following the post-earnings sell-off, Microsoft's stock has dropped to levels not seen since April of last year, and while it is down about 20% over the past six months, this may present a compelling buying opportunity for long-term investors, especially given its attractive valuation relative to the S&P 500 and the growth potential in AI.
See More
Japan's Prime Minister Victory Fuels Stock Market Surge
- Election Impact: Japan's Prime Minister Sanae Takaichi's landslide election victory has led to expectations that her economic policies will boost the stock market and weaken the yen, favoring looser monetary policy and increased government spending.
- Strong Market Performance: Following the election, Japanese stocks hit record highs, with gains extending into the following days, reflecting investor optimism about the ruling party's victory and confidence in future economic growth.
- Tech Stock Rebound: The U.S. markets also benefited, with Oracle shares rising 9.6% and Microsoft up 3.1%, contributing to a 0.47% increase in the S&P 500 and a 0.9% rise in the Nasdaq Composite, indicating a robust recovery in tech stocks.
- Alphabet's Financing Plan: Despite warnings of potential excess capacity in data centers, Alphabet plans to raise $20 billion through a bond sale, including a 100-year bond, demonstrating the company's confidence in long-term investments.
See More
S&P Lowers China Property Sales Forecast
- Property Sales Forecast Cut: S&P Global Ratings has lowered its forecast for China's property sales in 2026 to a decline of 10% to 14%, worse than the previous estimate of 5% to 8%, indicating persistent market weakness that could increase financial pressure on related companies.
- Fuel Shortage for Airlines: Cuba has announced that international airlines can no longer refuel on the island due to fuel shortages, which may impact tourism and international flight operations, exacerbating the economic challenges faced by the country.
- Novo Nordisk Lawsuit: Novo Nordisk has sued Hims & Hers for mass marketing unapproved copies of its Wegovy obesity drug in the U.S., leading to a 16% drop in Hims & Hers shares on Monday, highlighting the pharmaceutical industry's focus on intellectual property and intense market competition.
- U.S. Market Performance: The S&P 500 rose 0.47% on Monday, marking back-to-back gains, with other major U.S. indexes also climbing, reflecting improved market sentiment despite ongoing concerns regarding capital expenditures and financing among Big Tech companies.
See More
Provident Investment Management Fully Exits Maplebear Stake
- Complete Exit: On February 4, 2026, Provident Investment Management liquidated its entire stake in Maplebear by selling 489,560 shares for approximately $18 million, indicating a complete exit and reflecting a pessimistic outlook on the company's future prospects.
- Significant Price Decline: As of February 3, 2026, Maplebear's stock was priced at $36.08, down 25% over the past year, significantly lagging the S&P 500 by 40.4 percentage points, highlighting the pressure it faces in a competitive market.
- Slowing Revenue Growth: The company's revenue growth rate has decreased from 19% in 2023 to 11% in 2024, further slowing to 10% in the first three quarters of 2025, indicating a diminished market appeal amid competition from Amazon and Kroger.
- Cautious Investor Sentiment: While Maplebear's net income grew by 18% over the trailing twelve months and it trades at a P/E ratio of 20 with a forward P/E around 9, investors may prefer more competitive delivery stocks like Kroger, Uber, and DoorDash, making Provident's decision to sell more understandable.
See More
