Is Microsoft Stock Going to $500?

Since past October, erstwhile Microsoft (NASDAQ: MSFT) surged to an all-time precocious of $540 per share, the banal has been successful escaped fall. As of March 3, shares are down immoderate 24% from those October highs to $410 per share.

The driblet is successful portion owed to investors rotating retired of overvalued tech stocks, but determination are besides Microsoft-specific concerns that person caused the terms to tank. Most of the diminution came aft Microsoft's fiscal second-quarter net study for the play ended Dec. 31. Shares plummeted much than 17% to beneath $400 per stock connected respective concerns.

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Part of it was precocious superior expenditures (capex) and artificial quality (AI) spending for 2026. Investors are acrophobic that portion Microsoft's Azure AI unreality computing gross has been strong, it grew astatine a somewhat slower gait past quarter. And the anticipation for adjacent 4th is adjacent a small spot slower. We're talking a 40% maturation gait falling to 37% to 38% growth, truthful it's not similar a monolithic drop-off.

However, it was capable to rattle immoderate investors, peculiarly erstwhile combined with the information that Microsoft had grounds capex spending past 4th and anticipates adjacent higher capex spending this fiscal year.

The different interest is Microsoft's concern with OpenAI. Much of its monolithic $625 cardinal successful remaining show obligations, oregon RPO -- AI contracts successful the pipeline -- comes from OpenAI, astir 45% to beryllium exact, according to Microsoft CFO Amy Hood connected the latest net call.

There are worries astir Microsoft banal due to the fact that of fears that OpenAI won't beryllium capable to fulfill those contracts owed to reports that OpenAI expects to suffer wealth successful 2026. Also, investors spot the RPO numbers arsenic possibly inflated due to the fact that immoderate of the OpenAI RPO is from Microsoft's investments successful the company.

Overall, it spells attraction hazard for Microsoft arsenic investors interest astir the existent worth of the RPO.

These are valid concerns, but possibly a spot overblown. Microsoft Azure's maturation complaint is inactive incredibly strong, and it continues to turn faster than Amazon.

OpenAI attraction hazard should beryllium watched, but the aforesaid study that said it volition suffer wealth successful 2026 said the institution expects to beryllium profitable by 2029. Plus, OpenAI has grown astatine a historically accelerated pace, with 233% tally complaint gross maturation successful 2025, truthful it remains a semipermanent maturation motor for AI.