Microsoft stock remains driven by AI

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Anton Kharitonov

12.05.2026

Microsoft stock remains driven by AI — MSFT

Microsoft remains one of the key beneficiaries of the global AI boom, despite rising skepticism in the market about the scale of its capital spending. In the latest quarter, the Azure segment accelerated to roughly 40% year‑on‑year growth, and the AI business has already emerged as a standalone unit with an annualized revenue of about 37 billion dollars, 123% higher than the year‑earlier level.

The company has announced plans for 2026 calling for roughly 190 billion dollars in total infrastructure investment, the lion’s share of which is allocated to data centers and GPU infrastructure for AI workloads.

Relationship with OpenAI and Copilot: risks and monetization reality

In April 2026, Microsoft and OpenAI updated their partnership structure: Microsoft retains its position as the primary cloud provider and holds a long‑term license to OpenAI’s technology through 2032, but that license is no longer exclusive. This weakens Microsoft’s sustainable advantage within the ChatGPT ecosystem and gives OpenAI the freedom to work with other cloud providers, thereby increasing the risk premium investors apply to MSFT. At the same time, Copilot presents a mixed picture: although the number of paying Microsoft 365 Copilot licenses in the enterprise segment has roughly doubled by 2026, the share of paying users within the overall base remains relatively modest, and corporate adoption is progressing more slowly than initially expected.

Reprioritization: Xbox and selective AI expansion

In May 2026, Xbox announced the termination of Gaming Copilot development for consoles and the winding‑down of AI features in the Xbox mobile app, as part of a broader restructuring under new CEO Ayelet Sharmar. This move highlights a shift away from mass‑market AI features toward focused investments in core gaming products and infrastructure, rather than “pushy” AI assistants with questionable commercial returns. This is not a sign that Microsoft is stepping back from AI overall, but rather an indication of a more selective approach to AI expansion and project filtering based on profitability metrics.

Technical picture and key market triggers

From a technical standpoint, MSFT remains in a long‑term uptrend, but its stock has become noticeably more sensitive to any signs of a slowdown in AI cycles and an inflating AI‑capex bill. Investors still recognize the potential of Azure AI, but they are increasingly demanding proof that revenue growth and cloud‑segment margin expansion can justify hundreds of billions of dollars in investment.

The key triggers for any further price movement are: the pace of Azure’s growth, the trajectory of AI‑related revenue (currently at a 37 billion‑dollar annual run rate), the monetization level of Copilot - as stated in article Microsoft holds below $430, with $400 support in focus - and Microsoft’s ability to convert its AI infrastructure into a sustainable recurring revenue stream without diluting shareholder value.

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