As of 4:37 p.m. ET in New York on Friday, December 26, 2025, the New York Stock Exchange’s regular session has already closed, with after-hours trading underway. [1]
In late trading, Microsoft Corp. (NASDAQ: MSFT) was around $487.71, essentially flat on the day (down about 0.04% versus the prior close), valuing the company at roughly $3.85 trillion.
That quiet tape fits the broader market mood: U.S. stocks finished a light-volume, post-Christmas session nearly unchanged, with investors still watching the year-end “Santa Claus rally” window for direction heading into 2026. [2]
Where MSFT Stands in Today’s Market Tape
Microsoft shares ended the week in a market that’s near record territory but short on fresh catalysts. Reuters described Friday’s session as a “catching our breath” day after a strong run, with thin liquidity potentially exaggerating moves into year-end. [3]
Even broad tech exposure was calm: the Nasdaq-100 proxy (QQQ) and the S&P 500 proxy (SPY) were also close to flat into the close/late session, reinforcing the sense that investors are trading the calendar as much as fundamentals right now.
Seasonality is also in the conversation. MarketWatch notes that December 26 has historically been one of the most consistently positive days for the S&P 500 when markets are open—though it also cautions that seasonality alone shouldn’t drive decisions. [4]
The Big Microsoft Narrative: Azure + AI Strength vs. AI Capex Anxiety
Azure growth is strong—and Microsoft is saying demand is broad
Microsoft’s most recent reported quarter (fiscal Q1 2026, reported Oct. 29) showed Azure and other cloud services revenue up 40%, with Microsoft highlighting continued growth across workloads. [5]
That kind of growth rate remains a central support for the MSFT bull thesis: investors see Azure as both (1) a durable cloud platform and (2) a distribution engine for AI services (from infrastructure to Copilot products).
But spending is also breaking records
The core pushback is also clear: Microsoft is spending at historic levels to build AI capacity. Reuters reported Microsoft posted record capital expenditures of nearly $35 billion in its fiscal first quarter and warned spending would rise, reigniting investor debate about how quickly AI revenues will offset the infrastructure buildout. [6]
A widely syndicated recap from The Associated Press underscored the same tension: strong revenue/profit growth paired with AI infrastructure outlays that can pressure near-term sentiment even when long-term demand looks robust. [7]
Why this matters for MSFT stock now: Into year-end, when liquidity is thinner, investor positioning can swing on a single data point—an AI demand read-through, a margin comment, or a competitor headline—because the market is still actively repricing “how much capex is too much” for the AI cycle.
Revenue Levers Investors Are Repricing: Microsoft 365 Price Hikes
One near-term fundamental driver investors are incorporating into 2026 models is pricing power.
Reuters reported Microsoft will increase prices for Microsoft 365 productivity suites for commercial and government customers starting July 2026, with some plans seeing sharper increases (including small business and frontline worker tiers). [8]
For shareholders, that headline matters because it’s a classic Microsoft pattern: attach more value to the bundle over time and lift average revenue per user—especially as the company layers in AI features and usage-based elements across the suite.
Global Expansion: The $17.5 Billion India Investment Plan
Microsoft is also explicitly tying infrastructure expansion to high-growth markets. Reuters reported CEO Satya Nadella said Microsoft will invest $17.5 billion in India as global tech firms race to build digital infrastructure in fast-growing markets. [9]
Investors generally read this two ways:
- Bull case: it expands cloud and AI capacity where demand growth is structurally strong.
- Risk case: it reinforces the message that the capex cycle is not slowing soon.
OpenAI and the AI Ecosystem: Partnership Evolution, Funding, and Competitive Risk
Microsoft’s relationship with OpenAI remains a key “explain MSFT” variable for both bulls and bears—because it influences product roadmaps, cloud consumption, and regulatory scrutiny.
Microsoft says the partnership is entering a “next chapter”
In an official Microsoft blog post (Oct. 28, 2025), the company said it supports OpenAI’s move toward formation of a public benefit corporation structure and stated that, after recapitalization, Microsoft’s investment in OpenAI Group is valued at about $135 billion and represents roughly 27% on an as-converted diluted basis (with additional detail about stakes excluding recent funding rounds). [10]
The restructuring itself has been covered as material to the relationship
Reuters reported Microsoft and OpenAI reached a non-binding deal that would allow OpenAI to proceed with restructuring into a for-profit company—an important step in clarifying terms of one of the most closely watched AI partnerships in the market. [11]
The broader funding race highlights the “AI infrastructure bill”
If you’re trying to understand why Microsoft (and peers) keep spending, follow the capital flows. Reuters reported SoftBank racing to fulfill a $22.5 billion funding commitment to OpenAI by year-end, illustrating how enormous the infrastructure requirements have become across the AI stack. [12]
Investor takeaway: the more the AI ecosystem commits to massive buildouts, the more Microsoft’s near-term margins and free cash flow are debated—even if long-term demand appears real.
Regulation and Legal Risks: Cloud and AI Scrutiny Isn’t Going Away
Microsoft’s scale in cloud and AI also comes with steady regulatory headlines—another factor that can matter more in low-volume markets.
- EU cloud scrutiny: Reuters reported Google dropped an EU antitrust complaint about Microsoft’s cloud practices, but noted EU regulators had launched an investigation to see whether Microsoft should be subject to rules aimed at curbing power in the sector. Reuters also cited cloud market share estimates (Amazon leading, then Microsoft, then Google). [13]
- Teams bundling case: Reuters reported Microsoft avoided a potential EU antitrust fine by agreeing to bigger price differences for Office with Teams vs. without Teams, tied to complaints including one from Slack (Salesforce-owned). [14]
- OpenAI-related antitrust lawsuit: Reuters reported a proposed consumer class action alleging Microsoft used an exclusive cloud deal with OpenAI to restrict supply of compute resources needed to run ChatGPT. [15]
None of these necessarily change Microsoft’s earnings power tomorrow—but they can influence valuation, remedies, and headline risk, which becomes more visible when the market is already nervous about the “cost of AI.”
Wall Street Forecasts and Price Targets: Bulls Still See Upside (With Conditions)
Analyst optimism around Microsoft remains notably strong going into 2026, with much of it anchored to Azure and AI monetization.
- Wedbush (Dan Ives): Barron’s reported Wedbush reiterated an Outperform rating and a $625 price target, framing Microsoft as an AI front-runner and arguing the market underestimates the company’s AI-driven growth runway. [16]
- Visible Alpha snapshot (via Investopedia): Investopedia reported strong “buy” sentiment among analysts it referenced and discussed price target levels in the mid-$600s, while also noting the ongoing debate about AI spending and ROI. [17]
- Street target ranges (Barron’s compilation): Barron’s research/rating data showed an average target around $630 with a wide spread between high and low targets (illustrating that even bullish consensus contains meaningful uncertainty). [18]
The key condition analysts keep returning to: Microsoft has to prove that AI-driven revenue (Copilot, AI consumption on Azure, and broader platform usage) scales fast enough to justify the infrastructure bill.
Valuation, Dividends, and Shareholder Returns: What Long-Term Investors Track
At roughly $487 per share, MSFT’s valuation remains elevated by historical standards. The market data feed used here puts MSFT at about 36.7x earnings with an EPS figure around 14.06 (metrics vary by provider and methodology).
On the shareholder return side:
- Dividend: Microsoft announced on Dec. 2, 2025 a quarterly dividend of $0.91/share, payable March 12, 2026, with shareholders of record on Feb. 19, 2026 (and the ex-dividend date matching Feb. 19, 2026 per the announcement). [19]
- Dividend yield context: Nasdaq’s MSFT dividend history page listed an annual dividend of $3.64 and a dividend yield around 0.75% (near recent levels). [20]
- Buybacks/returns: In its fiscal Q1 2026 earnings materials, Microsoft said it returned $10.7 billion to shareholders via dividends and repurchases that quarter. [21]
- Authorization backdrop: Microsoft’s annual reporting and SEC filings reference continuing share repurchase programs/authorizations (including a $60.0 billion repurchase authorization referenced in SEC materials). [22]
What this means for the stock: Microsoft doesn’t need a high dividend yield to attract capital—its appeal is the combination of (1) recurring cash flows, (2) buybacks, and (3) perceived “platform ownership” of enterprise AI distribution.
If You’re Watching MSFT Into the Next Session: What to Know Before Monday
Because it’s now after the 4:00 p.m. ET closing bell, investors should separate after-hours noise from the next session’s tradable reality:
1) After-hours liquidity is thinner
Moves after 4:00 p.m. can look dramatic without reflecting broad institutional positioning. A calm after-hours tape doesn’t guarantee a calm open—and vice versa.
2) Next week’s macro calendar can matter even for mega-caps
Reuters’ “Week Ahead” preview highlighted that Fed meeting minutes and shifting expectations for the rate-cut path remain a market driver, especially with equities near milestones (like the S&P 500’s round-number levels). [23]
3) Year-end positioning can move MSFT even without Microsoft news
In the final sessions of the year, portfolio rebalancing, tax management, and factor rotations can temporarily overpower single-stock fundamentals—particularly for mega-cap weights in major indexes.
4) MSFT-specific catalysts to keep on your checklist
- AI capacity and margin commentary: Investors are still parsing whether AI infrastructure spend is peaking or merely pausing. [24]
- Pricing power follow-through: Details around Microsoft 365 pricing changes and AI packaging could reshape FY2026 revenue assumptions. [25]
- Regulatory headlines: EU cloud scrutiny and AI-related litigation can create headline volatility. [26]
5) Know the earnings “window,” but treat exact dates as provisional
Third-party earnings calendars are currently listing late-January/early-February 2026 windows for Microsoft’s next report, but dates can shift until confirmed by the company. [27]
Bottom Line for Microsoft Stock Right Now
As New York heads into the weekend, MSFT is closing out 2025 in a familiar place: a mega-cap bellwether with strong cloud execution and an arguably unmatched enterprise distribution channel for AI—paired with an AI capex profile that keeps valuation debates alive.
For investors, the next session setup is less about what happened in a quiet post-holiday Friday and more about what comes next: rate expectations, year-end flows, and whether Microsoft can keep converting AI demand into durable, high-margin revenue fast enough to satisfy a market that is increasingly ROI-focused. [28]
References
1. www.nyse.com, 2. www.reuters.com, 3. www.reuters.com, 4. www.marketwatch.com, 5. www.microsoft.com, 6. www.reuters.com, 7. apnews.com, 8. www.reuters.com, 9. www.reuters.com, 10. blogs.microsoft.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.barrons.com, 17. www.investopedia.com, 18. www.barrons.com, 19. news.microsoft.com, 20. www.nasdaq.com, 21. www.microsoft.com, 22. www.sec.gov, 23. www.reuters.com, 24. www.reuters.com, 25. www.reuters.com, 26. www.reuters.com, 27. finance.yahoo.com, 28. www.reuters.com
