<\/p>\n
Microsoft (MSFT) has found itself in unfamiliar territory.\u00a0<\/p>\n
For a stock that spent much of the past decade as Wall Street\u2019s darling, 2026 has been anything but.<\/p>\n
According to Seeking Alpha, the stock has tanked roughly 17% year-to-date, its worst quarterly showing since the 2008 financial crisis.\u00a0<\/p>\n
However, top bank BNP Paribas just cut through the noise with one of the sharpest calls on Wall Street.\u00a0<\/p>\n
The bank said that the ingredients for a rebound are simmering, but that the near-term pain isn’t going away quietly.<\/p>\n
BNP analyst Stefan Slowinski didn’t mince words about the frustration, saying that,<\/p>\n
“The ‘SaaS Smash’ has not spared Microsoft, which is the largest SaaS vendor, mainly through its 365 Commercial Cloud products.”<\/p>\n
However, Slowinski believes there isn\u2019t a broken core business here.<\/p>\n
Azure continues to generate a ton of cash, and the enterprise moat is massive to say the least. The conundrum is whether the tech giant can convert its massive AI investments into real top-line growth in a relatively short period.\u00a0<\/p>\n
This, in turn, is a twofold problem: Copilot traction and Azure capacity allocation.<\/p>\n
Slowinski argues that investors have grown too impatient with Copilot’s lack of clear momentum, potentially overlooking future growth from Anthropic\u2019s Cowork product.<\/p>\n
In fact, Microsoft CEO Satya Nadella is reportedly working to fix Copilot, with a clear focus on improving user experience and performance.\u00a0<\/p>\n
At the same time, the company is tackling another issue in Azure capacity.<\/p>\n
BNP Paribas estimates that nearly one-third of Microsoft\u2019s new AI capacity last quarter was used internally, supporting its internal apps and training AI models, rather than being sold to customers.\u00a0<\/p>\n
According to Microsoft\u2019s latest earnings transcript (Q2 2025), if the capacity had been directed to external clients, growth might have topped 40%, rather than the 38% reported.<\/p>\n
The fear here is that Microsoft is being drawn into a relentless and incredibly expensive superintelligence race with its own partner OpenAI, which happens to be Azure\u2019s share of the collateral damage.\u00a0<\/p>\n
Strong fundamentals remain intact, though Copilot traction and capex concerns weigh on sentiment<\/p>\n
Getty Images 	picture alliance / Contributor<\/p>\n
Microsoft stock returns compared to the S&P 500Over the past week, Microsoft returned 15.23%, compared with the S&P 500\u2019s 4.46%.Over the past month, Microsoft returned 7.49%, compared with the S&P 500\u2019s 6.41%.Over the past six months, Microsoft returned -15.97%, compared with the S&P 500\u2019s 7.54%.Year to date, Microsoft returned -11.11%, compared with the S&P 500\u2019s 4.14%.Over the past year, Microsoft returned 15.69%, compared with the S&P 500\u2019s 35.13%.Over the past three years, Microsoft returned 50.24%, compared with the S&P 500\u2019s 72.30%.
\nSource: Seeking Alpha.
\nMicrosoft’s fiscal Q2 2026 Highlights<\/p>\n
Microsoft\u2019s most recent earnings report suggests the company is far from broken. Revenue is growing at a double-digit clip, while margins remain the envy of the software world.<\/p>\n
Revenue: $81.3 billion, up 17% year-over-year. Comfortably ahead of consensus.Azure Growth: 38% in constant currency. Solid, but below the “over 40%” whisper number.Productivity and Business Processes: $31.2 billion, up 14%.Intelligent Cloud: $29.1 billion, up 19%.Commercial Remaining Performance Obligation: $625 billion. A backlog roughly the size of Switzerland’s GDP.Copilot Seats: 15 million paid seats. Impressive, but still just 3.3% of Microsoft’s 450 million commercial M365 base.
\nSource: Investor Relations Microsoft.
\nBNP’s formula for a Microsoft rebound\u00a0<\/p>\n
BNP’s Slowinski outlined a potential formula that could kickstart Microsoft’s recovery on the stock market.<\/p>\n
More AI Stocks:<\/p>\n
Morgan Stanley sets jaw-dropping Micron price target after eventBank of America updates Palantir stock forecast after private meetingMorgan Stanley drops eye-popping Broadcom price target<\/p>\n
He sees three primary catalysts, which include:<\/p>\n
Renewed confidence in CopilotAzure\u2019s consistent revenue beatsA clear path to moderating capex growth.<\/p>\n
The capex narrative is particularly crucial.\u00a0<\/p>\n
Microsoft\u2019s capex is on track to hit $120 billion this fiscal year, and it\u2019s expected to start leveraging aging “neocloud” partner capacity next year.<\/p>\n
In fact, a report from Futurum Group says AI capital spending will reach $690 billion this year.<\/p>\n
“With Microsoft leveraging neocloud partner capacity next year, we may start to see capex growth slow,” Slowinski concluded.\u00a0<\/p>\n
Layered with attractive free cash flow margins north of 20%, renewed confidence in Copilot, and consistent top-line beats on the cloud side, this creates a winning formula for Microsoft’s stock to get back on track.<\/p>\n
It\u2019s worth noting that other analysts have a similar view.<\/p>\n
For instance, according to Tipranks, Bernstein’s Mark Moerdler recently reiterated an Outperform rating and $641 price target on Microsoft stock, arguing the disconnect between capex and revenue is \u201ctiming rather than any fundamental problem with the business.\u201d<\/p>\n
Wall Street price targets for Microsoft stock<\/p>\n
Wall Street\u2019s average price target for Microsoft is about $579.57, which implies roughly 34.68% upside from the current share price.<\/p>\n
It\u2019s important to note that analyst targets vary widely, though, with the low-end estimate at $392 and the high-end target at $730.<\/p>\n
That spread shows there\u2019s still a ton of upside in Microsoft stock, even as analysts differ on just how far it can run.<\/p>\n
Truist Securities: $675 \u2014 Buy.Bernstein: $641 \u2014 Outperform.Morgan Stanley: $650 \u2014 Overweight.Goldman Sachs: $600 \u2014 Buy.Mizuho: $515 \u2014 Outperform.Benchmark: $450 \u2014 Buy.BNP Paribas: $556\u2014Outperform.<\/p>\n
Related: Goldman Sachs just found a reason to like Nvidia stock again<\/p>\n
#BNP #Paribas #delivers #blunt #message #Microsoft #stock<\/p>\n","protected":false},"excerpt":{"rendered":"
Microsoft (MSFT) has found itself in unfamiliar territory.\u00a0 For a stock that spent much of…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[259],"tags":[855,7057,1372,574,879,7058,91],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/4206"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4206"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/4206\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}