{"id":282384,"date":"2026-02-05T16:20:10","date_gmt":"2026-02-05T16:20:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/282384\/"},"modified":"2026-02-05T16:20:10","modified_gmt":"2026-02-05T16:20:10","slug":"stifel-downgrades-microsoft-says-ai-spending-and-azure-concerns-could-limit-near-term-upside","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/282384\/","title":{"rendered":"Stifel downgrades Microsoft, says AI spending and Azure concerns could limit near-term upside"},"content":{"rendered":"<p>Stifel believes that heavy AI spending and rising competition could weigh on Microsoft &#8216;s growth. The investment firm downgraded the &#8220;Magnificent Seven&#8221; technology titan to a hold rating from buy. Analyst Brad Reback also lowered his price target to $392 from $540. Shares of Microsoft are flat over the past 12 months but have slipped 14% this year. Reback&#8217;s revised forecast implies that the stock has a further 5% to fall. MSFT 1Y mountain MSFT 1Y chart Reback said that his downgrade comes as Wall Street&#8217;s earnings and revenue expectations appear too optimistic. &#8220;Given the well-documented Azure supply issues, coupled with Google&#8217;s strong GCP Gemini results this evening and growing Anthropic momentum, we believe near-term Azur acceleration is unlikely,&#8221; he wrote. &#8220;Net\/net, while MSFT remains well positioned over the long-term to navigate the rapidly [evolving] AI landscape over the coming years, the near-term prospects seem a bit more cloudy as [Google] appears to be rapidly gaining AI share and MSFT&#8217;s OAI relationship is not nearly as additive [as] it once was.&#8221; Reback also expects Azure&#8217;s gross margin compression to accelerate in the coming quarter, thanks to meaningful capital expenditures growth and an increasing percentage of spend centered on short-lived compute assets. &#8220;[Beyond] the COGS headwinds, management has made it very clear over the last 2 quarters they [are] stepping up their AI R &amp; D investments which comes with a high price tag as it relates to hiring retaining personal as well as supporting these efforts (lots of GPU cycles consumed),&#8221; the analyst added. &#8220;The [net] impact of this is that OPEX growth is likely to be much closer to revenue growth than we [have] seen over the last several years.&#8221; Reback sees no near-term catalysts for the stock, and expects it to trade range-bound either until Azure posts a significant acceleration or until capital expenditures growth slows below Azure growth, he wrote. Reback&#8217;s downgrade comes a week after Microsoft stock dipped 10% after it shared fiscal third-quarter operating margin guidance of 45.1%, below StreetAccount&#8217;s 45.5% consensus. Cloud growth also moderated, with revenue from Azure and other cloud services coming in at 39% and below the 40% growth from Microsoft&#8217;s fiscal first quarter.<\/p>\n","protected":false},"excerpt":{"rendered":"Stifel believes that heavy AI spending and rising competition could weigh on Microsoft &#8216;s growth. The investment firm&hellip;\n","protected":false},"author":2,"featured_media":282385,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,122,61,1670,60,1672,965,80],"class_list":["post-282384","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-business-news","tag-ie","tag-investment-strategy","tag-ireland","tag-microsoft-corp","tag-stock-markets","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/282384","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=282384"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/282384\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/282385"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=282384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=282384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=282384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}