3 days ago
3
Thomas Richmond
Mon, May 4, 2026 astatine 8:13 AM CDT 4 min read
Quick Read
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Microsoft (MSFT) reported Q3 gross of $82.9B (+18%), operating income of $38.4B (+20%), and AI concern gross tally complaint of $37B increasing 123% year-over-year, with commercialized remaining show obligations providing beardown gross visibility.
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Wall Street’s 55 of 58 Buy-rated analysts spot 41% upside to a $576.42 people price, betting that Microsoft’s $37B AI gross tally complaint and 40% Azure maturation volition sorb the company’s dense AI infrastructure spending arsenic monetization accelerates.
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The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Microsoft wasn't 1 of them. Get them present FREE.
Microsoft (NASDAQ:MSFT) trades astir $408, portion Wall Street's statement people sits astatine $576.42, meaning analysts spot a important 41% upside for the banal today. Microsoft is 1 of the world's astir invaluable companies, with a $3.16 trillion marketplace headdress and a bundle empire that leans heavy connected Azure unreality and its OpenAI partnership. The stock's show contiguous is mostly tied to the market's mentation of the company's AI infrastructure spending, arsenic we're seeing the marketplace reward companies seeing bully returns from capex spending portion punishing companies that look to beryllium losing wealth connected infrastructure spending.
Why Microsoft's Strong Q3 Earnings Still Led to a Selloff
Microsoft banal fell astir 4% aft third-quarter net contempt reporting results that mostly reinforced the bull case. Revenue roseate 18% to $82.9 billion, portion operating income accrued 20% to $38.4 billion. Net income reached $31.8 billion, and EPS came successful astatine $4.27, each up of expectations. Growth remains concentrated successful unreality and AI. Microsoft Cloud gross reached $54.5 billion, up 29%, portion Intelligent Cloud gross grew 30% to $34.7 billion. Azure and different unreality services accrued 40%, showing continued spot successful endeavor demand.
The AI concern is scaling quickly. Management said it has surpassed a $37 cardinal yearly gross tally rate, increasing 123% twelvemonth implicit year. At the aforesaid time, backlog remains strong. Commercial remaining show work roseate 99% to $627 billion, providing visibility into aboriginal revenue. The takeaway is that the request Microsoft is seeing is keeping gait with the company's AI investment.
The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Microsoft wasn't 1 of them. Get them present FREE.
Why 55 of 58 Analysts Still Rate the Stock a Buy
Despite the earlier selloff, expert sentiment has not changed. Out of 58 firms, 55 complaint the banal a Buy oregon Strong Buy, with conscionable 3 Holds and nary Sell ratings. The thesis centers connected visibility and scale. A astir $630 cardinal backlog, 40% Azure growth, and a rapidly expanding AI concern suggest Microsoft is inactive aboriginal successful the monetization cycle.
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