‘Holding Steady,’ Says Investor About Microsoft Stock

Microsoft (NASDAQ:MSFT) presents an interesting conundrum for investors.

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On the one hand, the company is clearly delivering the goods. Microsoft recorded $81.3 billion in revenues during its last quarter, an increase of 17% year-over-year. The bottom line also grew, as the company’s operating income of $38.3 billion reflected an increase of 21%.

And yet, there was another slew of news that didn’t exactly sit well with investors. That was the huge influx of $37.5 billion in capex that the company spent last quarter. The overall fears ruminating throughout the market have been a drag on AI stocks recently, and MSFT is no exception.

MSFT’s share price has lost some 19% of its value this year.

So, is now a good time for investors to buy, sell, or sit tight? One investor known by the pseudonym Wise Bull isn’t going anywhere.

“MSFT could serve as a solid long-term hold for typical technology growth at the mid-teens level,” says the investor.

Wise Bull explains that Microsoft is a “predominant” leader in enterprise IT, mostly thanks to its cloud offerings. That cloud-based growth remains a strong selling point, as Microsoft Azure enjoyed a 39% growth during the last quarter.

The investor readily admits that there’s another side of the coin, as the heavy AI spending will certainly be eating into Microsoft’s margins. The question remains, however, the extent to which the company will benefit from all this spending.

Regarding this matter, Wise Bull offers some thoughts.

“I see AI as going to be a different but just a normal IT growth cycle that’s driven by new technology, as always,” notes the investor.

In that sense, MSFT will enjoy the benefits of AI growth. However, it doesn’t necessarily mean that the company’s share price will have such a great, market-beating run in the current year, at least according to the investor.

When push comes to shove, that leaves Wise Bull not too bullish when it comes to Microsoft at present.

“The overheated AI hype … may serve as a headwind for the stock price to recover in 2026,” concludes Wise Bull, who gives MSFT a Hold (i.e., Neutral) rating. (To watch the Wise Bull’s track record, click here)

Wall Street is still feeling good about MSFT. With 33 Buys and 3 Holds, MSFT enjoys a Strong Buy consensus rating. Its 12-month average price target of $594.02 points to an upside north of 50%. (See MSFT stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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