Today: 9 November 2025
Subscribe
Microsoft (MSFT) Stock Update & Insight Report – 2 Oct 2025
 ·  ·  ·  · 

MSFT Before the Bell (Nov 10, 2025): OpenAI–AWS shockwave, Azure outlook, $9.7B IREN chips pact, dividend date, and week‑ahead catalysts

by
9 November 2025

Published: Monday, November 10, 2025 — Pre‑market

Quick take

  • Stock snapshot: Microsoft last traded at $496.82 with an estimated $3.85T market cap and ~36.7x trailing P/E. Figures reflect the latest available trade as of Nov. 8 (01:15 UTC).
  • Fresh headline risk:OpenAI’s seven‑year, $38B cloud deal with AWS ends Azure’s exclusivity and will dominate Monday’s narrative across mega‑cap tech. [1]
  • Counterweight for Azure: Microsoft still re‑papered its OpenAI partnership on Oct. 28 (OpenAI valued at ~$500B; Microsoft retains a significant stake and long‑term tech rights), and management says OpenAI‑related commitments should boost bookings. [2]
  • Securing compute: Microsoft struck a $9.7B, five‑year capacity deal with IREN for Nvidia chips and a multi‑billion‑dollar GPU deployment with Lambda, a signal it’s racing to alleviate AI capacity constraints flagged by management. [3]
  • Dividend clock:$0.91 quarterly dividend payable Dec. 11; ex‑div. Nov. 20. Annual meeting set for Dec. 5 (virtual). [4]

1) Overnight & weekend developments investors are trading

OpenAI → AWS ($38B/7yrs). OpenAI will run workloads on Amazon Web Services, diversifying away from sole reliance on Azure. The timing (announced Nov. 3) keeps pressure on Microsoft’s Azure share-of-wallet narrative into this week. Watch sympathy moves in AMZN (AWS) and NVDA. [5]

Microsoft–OpenAI, chapter two. On Oct. 28, Microsoft and OpenAI restructured their relationship, with press and filings indicating OpenAI’s valuation around $500B and Microsoft maintaining a meaningful equity stake and long‑term product/model rights—even as OpenAI gains freedom to use multiple clouds. This reduces legal/structural overhangs but introduces multi‑cloud optics for Azure. [6]

Compute land‑grab continues. To address persistent GPU tightness, Microsoft signed a $9.7B deal for AI compute capacity with IREN and a multi‑billion‑dollar GPU build‑out with Lambda. Expect bulls to frame these as supply unlocks for Azure/Copilot, while bears flag capex and margin implications. [7]

2) The latest quarter in one screen (FY26 Q1, reported Oct. 29)

  • Revenue:$77.7B (+18% y/y).
  • Non‑GAAP EPS:$4.13 (+23% y/y). (Non‑GAAP excludes a $3.1B hit from OpenAI investments.)
  • Microsoft Cloud revenue:$49.1B (+26% y/y).
  • Azure & other cloud services:+40% (cc +39%).
  • Commercial RPO:$392B (+51% y/y).
  • Capital returns:$10.7B (dividends + buybacks).
    Source: company release. [8]

Color for the open: The mix shows AI‑pull across cloud and M365, with Azure acceleration the standout. Management highlighted strong demand for Copilots and cloud services, though OpenAI‑related investment accounting adds noise to GAAP results. [9]

3) What Microsoft guided for this quarter (FY26 Q2)

  • Company revenue:$79.5–$80.6B (+14–16% y/y).
  • Azure growth: ~37% (cc), but capacity‑constrained through at least FY26.
  • Microsoft Cloud gross margin: ~66%, down y/y on AI mix and investments.
  • Capex: Rising sequentially as GPU/CPU spend accelerates.
  • Bookings: Expected to be helped by OpenAI commitments signed around the earnings date.
    Source: CFO commentary on the Q1 call. [10]

Interpretation: The guide implies durable top‑line momentum but acknowledges infrastructure bottlenecks and margin pressure from AI scale‑up—key debate points into the open.

4) Policy & legal backdrop

  • EU Teams case largely neutralized: Brussels accepted Microsoft’s Office/Teams commitments in September (unbundling, pricing, interoperability), reducing a multi‑year antitrust overhang. Changes began Nov. 1. [11]
  • UK cloud scrutiny: The CMA remains focused on cloud competition and licensing practices across hyperscalers, keeping a medium‑term regulatory watch flag on Azure. [12]

5) Calendar & catalysts

  • U.S. CPI (Oct): Thu, Nov. 13, 8:30 a.m. ET — key for yields, equity multiples, and AI‑heavy megacaps. [13]
  • Microsoft Ignite 2025 (San Francisco): Nov. 18–21 — expect Copilot/AI platform updates and enterprise adoption stories. [14]
  • MSFT dividend/ex‑date:Nov. 20; $0.91 payable Dec. 11. Annual meeting:Dec. 5 (virtual). [15]
  • Trading hours note: U.S. stocks trade normally this week; Tuesday (Nov. 11) is Veterans Day with bond markets closed but NYSE/Nasdaq open. [16]

6) What to watch at the open

  1. Azure narrative vs. OpenAI’s multi‑cloud pivot. The AWS pact is a headline negative for exclusivity optics, yet Microsoft’s revised OpenAI deal and management comments on bookings offer a counterbalance. Early commentary will parse how much OpenAI spend still routes to Azure versus AWS/Oracle. [17]
  2. Supply relief from IREN/Lambda. Any incremental detail on ramp timing, delivered megawatts, or GB300 availability will sway sentiment around Microsoft’s capacity constraint guidance. [18]
  3. Margin math. With cloud GM guided to ~66% on AI mix, investors will watch whether efficiencies or software ARPU (M365 Copilot/E5) can offset hardware intensity. [19]
  4. Macro sensitivity. Rates remain the tape’s referee; Thursday’s CPI can whipsaw long‑duration assets like MSFT. [20]

7) Analyst positioning (context, not advice)

Street stance remains constructive post‑earnings. Recent tallies show average 12‑month MSFT targets in the ~$635 area among large coverage sets, with most brokers on Buy/Overweight—though several have flagged capex as a near‑term lid on multiple expansion. [21]

8) Bottom line

Heading into Monday, Nov. 10, MSFT trades against two cross‑currents: (1) optics of OpenAI’s AWS shift versus (2) evidence of sustained demand (Azure +40% last quarter; Q2 guide solid) and actions to unlock supply (IREN/Lambda). With Ignite and CPI imminent and ex‑div next week, expect the open to hinge on how investors handicap Azure’s growth capacity versus share‑of‑wallet risk and the durability of AI‑driven software ARPU. [22]

Disclosure/Disclaimer: This article is for informational purposes only and is not investment advice. Always do your own research and consider consulting a licensed financial professional. Stocks and markets involve risk, including loss of principal.

Introducing new deployment and cost management solutions for Azure OpenAI Service
Watch this video on YouTube.

References

1. www.reuters.com, 2. www.reuters.com, 3. www.reuters.com, 4. news.microsoft.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.microsoft.com, 9. www.microsoft.com, 10. www.microsoft.com, 11. www.reuters.com, 12. www.gov.uk, 13. www.bls.gov, 14. ignite.microsoft.com, 15. news.microsoft.com, 16. www.fidelity.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.microsoft.com, 20. www.bls.gov, 21. www.marketwatch.com, 22. www.microsoft.com

Tags:

Marcin Frąckiewicz Latest posts

CEO of TS2 Space and founder of TS2.tech. Expert in satellites, telecommunications, and emerging technologies, covering trends in space, AI, and connectivity.

  1. Government Shutdown Triggers 8,800+ Sunday Flight Disruptions: FAA Orders Up To 10% Cuts At 40 Major Airports (Nov. 9, 2025)
  2. Interstellar Comet 3I/ATLAS on Nov. 9, 2025: Tail Mystery, New Jet Images, and Where to Look This Week
  3. Marriott Terminates Sonder Partnership After ‘Default’: Bonvoy Bookings Halted, 2025 Room‑Growth Outlook Trimmed
  4. AVGO Stock: What to Know Before the Bell on November 10, 2025

Stock Market Today

  • ASX Penny Stocks in Focus as Australian Market Near Week's End
    November 9, 2025, 4:08 PM EST. Australian futures hint at a quiet end to the week, down about 0.5%, as U.S. job cuts and AI valuation concerns temper sentiment. Amid the backdrop, traders hunt for potential in penny stocks on the ASX, balancing affordability with growth upside. Highlighted names include EZZ Life Science Holdings (ASX: EZZ; market cap ~A$114M) with solid liquidity and a robust ROE, and Dusk Group (ASX: DSK) with a smaller cap and strong financial health. Other well-rated picks span West African Resources (WAF) and Service Stream (SSM) among larger caps. The analysis emphasizes Financial Health Rating quality (★★★★★☆ to ★★★★★★) but notes mixed earnings momentum and recent index changes. Investors should consider liquidity, debt levels, and ROE when screening the ASX for niche opportunities.
  • Weekend Effect Explained: Monday Returns, Investor Behavior, and Market Anomalies
    November 9, 2025, 4:02 PM EST. The weekend effect describes lower stock returns on Mondays than the prior Friday. First documented by Frank Cross in 1973, it notes frequent negative Monday returns after Friday gains. Explanations include investor behavior: more selling on Mondays, reactions to Friday after-hours news, and irrational trading. Some theories point to bad news releases on Fridays, short selling, or a mix of factors that vary with company size. The pattern has been persistent at times and faded between 1987 and 1998 before reemerging, underscoring the complexity of market anomalies and the importance of viewing Mondays in the context of weekly sentiment and information flow.
  • Buffett Bets on Value as US Stocks Look Stretched: Nucor and UnitedHealth Spotlight
    November 9, 2025, 4:00 PM EST. With the Warren Buffett Indicator around 218%, valuations look stretched. Yet Warren Buffett and his team remain buyers, sticking to a discipline of value at a fair price. The new bets highlight Nucor (NUE), a steel producer leveraging recycled scrap amid tariffs, and UnitedHealth Group (UNH), the largest US insurer with strong margins and cash flow. Nucor benefits from AI-driven infrastructure demand and ongoing electrification spending, supported by a relatively modest forward P/E of about 12.2x. Risks include cyclical steel demand and sticky inflation; a slowdown in AI spending could hamper growth. UNH faces heightened regulatory scrutiny over anti-competitive practices, tempering some upside despite its resilient, cash-generative model.
  • 10 of the Highest Stock Prices in History: Berkshire Hathaway Leads with BRK.A
    November 9, 2025, 3:58 PM EST. A look at how some stocks reach historic price levels without necessarily signaling quality. The list is led by Berkshire Hathaway A shares (BRK.A), which topped about $809,350 in May 2025, followed by Chocoladefabriken Lindt & Sprüngli AG with a CHF 134,000 share price. Rounding out the trio, NVR has traded around $9,924.40. The piece also notes that a high price doesn't equal a high market value; market capitalization depends on both share price and outstanding shares. For context, BRK.B trades far lower, underscoring how price alone can be misleading. When evaluating stocks, investors should compare market cap and consider alternatives like mutual funds.
  • Fed Dissent: Miran Pushes for 50bp Cut as Markets Watch | Interview Recap
    November 9, 2025, 3:54 PM EST. Fed Governor Stephen Miran dissented at the October meeting, arguing that delaying a larger rate cut risks the economy. He backed a 50bp cut rather than the Fed's 25bp move, warning that a smaller path could leave inflation and growth unsupported. In a sit-down with Yahoo Finance's Jennifer Schonberger, Miran details his concerns about delaying relief and the potential market impact. The interview sheds light on how this dissent could influence traders watching markets and the latest Market Catalysts action. For those seeking deeper insight, watch the full Yahoo Finance interview to gauge what the Fed's stance could mean for stocks, bonds, and the broader investment backdrop.
Apple’s July 2025 Bombshells: Foldable iPhone, AI Secrets, Encryption Showdown & More
Previous Story

AAPL Stock Before the Bell (Nov 10, 2025): Ex‑Dividend Day, Q4 Results, iPhone 17 Demand, and Key Risks

Nvidia’s $5 Trillion Milestone: AI Boom Propels NVDA Stock to New Heights
Next Story

NVDA Stock Before the Bell (Nov 10, 2025): China Curbs, TSMC Supply, New AI Cloud Deals, and Earnings Countdown

Related Articles

Go toTop