NEW YORK, July 6, 2026, 19:03 EDT
- Microsoft Corporation NASDAQ:MSFT finished its last session at $386.74, off 0.9%. Invesco QQQ Trust NASDAQ:QQQ gained 1.4%.
- The stock trailed QQQ by roughly 2.3 points after Microsoft announced 4,800 layoffs and signaled a bigger shakeup in its Xbox business.
- Wolfe Research lowered its price target to $525 from $570, citing risks around AI capital spending and memory costs.
- Analyst targets remain grouped close to $560, about 45% higher than the recent price.
U.S. stocks traded in a standard session Monday coming off Nasdaq’s July 3 holiday break. At press time, Microsoft Corporation NASDAQ:MSFT was moving in the after-hours slot, which Nasdaq shows as running 16:00 to 20:00 ET.
Microsoft ended at $386.74, off $3.64 from its previous finish. QQQ was up 1.36% and SPDR S&P 500 ETF Trust NYSEARCA:SPY added 0.84%. Microsoft lagged QQQ by roughly 2.3 percentage points, falling as the broader tech index moved higher.
| Monday tape | Latest price | Day move | Investor read |
|---|---|---|---|
| Microsoft Corporation NASDAQ:MSFT | $386.74 | -0.93% | Job cuts failed to remove AI spend overhang |
| Invesco QQQ Trust NASDAQ:QQQ | $722.82 | +1.36% | Buyers went after big tech |
| SPDR S&P 500 ETF Trust NYSEARCA:SPY | $751.28 | +0.84% | Wider market held up |
The headline number wasn’t jobs, but cash burn. Microsoft told analysts back in April it’s targeting capital spending of about $190 billion for 2026, including $25 billion tied to pricier components. Q4 capex is set to top $40 billion. CFO Amy Hood said Microsoft still trusts the “return on these investments.” Microsoft
Microsoft on Monday announced plans to slash 4,800 jobs, or about 2.1% of its staff. Xbox will take the biggest hit with 3,200 job losses, 1,600 of them on Monday. The company also aims to sell or spin off a number of studios after ramped-up game sector spending.
Amy Coleman, Chief People Officer, told employees the positions cut are “not being replaced by AI,” though she noted “AI is changing how work gets done.” The company said over 30% of eligible staff opted for a retirement program, and more than 4,000 employees shifted into new roles in the past year. The Verge
Investors hit Microsoft with a much larger equity drop. Based on the latest market cap and share price, Monday’s fall wiped out about $27.1 billion in value, well over the $900 million in one-off charges the company had flagged for Q4 retirements earlier. This doesn’t count payroll savings. The stock moved on capex risk.
Parth Talsania, CEO at Equisights Research, called the layoffs “portfolio reallocation and operating discipline” and said investors now want to see AI monetization “scaling faster than AI-related costs.” Gil Luria, managing director at D.A. Davidson, said Microsoft’s job cuts are a way to “pay for its AI investments.” Reuters
Wolfe Research’s Alex Zukin lowered his Microsoft price target to $525 from $570, though he left his Outperform rating unchanged. Zukin pointed to AI spending and higher memory-chip costs. According to TipRanks, Zukin raised his Microsoft capex forecast for fiscal 2027 to $270 billion from $230 billion, but he’s still positive on the company’s “full-stack monetization approach” and “Azure growth acceleration.” TipRanks
| Forecast check | Figure | Why it matters |
|---|---|---|
| Microsoft plans about $190 billion in capex for calendar 2026 | About $190 billion | AI needs to pay off on a big scale |
| Microsoft says Q4 capex will top $40 billion | Above $40 billion | Company is spending more now |
| Wolfe now sees FY2027 capex at $270 billion, was $230 billion | $270 billion, up from $230 billion | Capex expectations keep climbing |
| Wolfe cuts MSFT target to $525 from $570 | $525, cut from $570 | Bullish view eased back |
| Microsoft next quarter revenue forecast on TradingView | $87.61 billion | Quarterly results coming up |
Street targets for the stock are mostly bullish, but forecasts vary a lot. Benzinga shows a consensus at $564.87 from 39 analysts, including recent notes from Wolfe Research, D.A. Davidson, and Stifel. StockAnalysis has the 12-month target at $560.21 from 56 analysts. TradingView lists an average estimate of $558.09, with targets from $400 up to $870.
| Stock forecast source | Target | Implied move vs $386.74 |
|---|---|---|
| Wolfe Research | $525.00 | +35.8% |
| D.A. Davidson | $550.00 | +42.2% |
| TradingView average | $558.09 | +44.3% |
| StockAnalysis average | $560.21 | +44.9% |
| Benzinga consensus | $564.87 | +46.1% |
| TradingView low-high range | $400-$870 | +3.4% to +125.0% |
Azure is still the bright spot. Back in April, Microsoft reported Azure and other cloud-services revenue up 40% in its fiscal Q3, and guided for Q4 growth of 39% to 40% in constant currency. That’s better than the 36.7% consensus from Visible Alpha, as reported by Reuters. Microsoft’s AI run rate landed at $37 billion, according to the same Reuters report.
Microsoft is set to release results July 28, TradingView says. Wall Street is looking for EPS of $4.24 and revenue around $87.61 billion.
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