NEW YORK, June 8, 2026, 14:01 EDT
- Microsoft shares dropped roughly 1.5% in afternoon trading, with the company’s market cap slipping to about $3.05 trillion. The move comes as arguments over its AI growth prospects intensified.
- Wells Fargo raised its Microsoft target to $650 from $625. Other commentary has been mixed, with some calling the stock a “buy now” and others sticking to a hold.
- NHS England’s move to roll out Microsoft 365 Copilot offered Microsoft another signal of enterprise AI demand that went past what investors had predicted.
Microsoft shares fell Monday as some on Wall Street stayed upbeat, but traders focused on whether the company’s $37 billion AI business will expand quickly enough to make all the spending on chips, data centers and models pay off.
The stock traded lower at $410.30 in the afternoon. Instead of ending the debate, the drop stirred it up further.
Microsoft isn’t being broken out by just Office, Windows, or Azure anymore. The market is weighing the whole package now, looking at how much AI might boost all three—and if customers are going to pay enough to make the build-out worth it. In April, Microsoft said its AI business had reached a $37 billion annual revenue run rate, up 123% from last year. Azure and other cloud business rose 40%.
Microsoft is seeing new evidence its tools are being used. The company said NHS England will deploy Microsoft 365 Copilot to 505,000 clinicians and staff, citing trial results from 30,000 employees that showed an average 43-minute a day saving on admin tasks per user. Darren Hardman, Microsoft UK & Ireland chief, said the rollout could let NHS teams “cut through everyday admin.” Source
Wells Fargo’s Michael Turrin stayed bullish on Microsoft, bumping his price target up to $650 from $625 and sticking with the firm’s Overweight rating. Turrin said in a note that Microsoft is “better positioned at software layer” than many investors believe, and pointed to the company’s steps on capacity, models and Copilot as the right direction. TradingView
There’s another take. Seeking Alpha’s Ritabrata Das said Monday that Microsoft is strong in AI and noted Azure’s annual revenue above $75 billion and a $37 billion AI run rate. But he kept a Hold call, pointing to capital needs, pressure on margins, and wanting more proof that AI sales can beat the rising costs.
Cost is the issue. Microsoft reported its gross margin percentage dropped in the March quarter as it put money into AI infrastructure and saw more use of AI products. Cloud gross margin slid to 66%, though some of that was cushioned by efficiency improvements in Azure and Microsoft 365 Commercial cloud.
Bulls in the retail crowd are looking at valuation. Keithen Drury, a technology analyst at Motley Fool, said Microsoft shares look cheap on some cash-flow metrics, while the company keeps putting up 18% revenue growth and sees strong AI demand. He said there was no clear business reason for the market to knock the stock down.
Synergy Research Group numbers, reported by CRN, show Amazon Web Services at 28% share of global cloud infrastructure in Q1. Microsoft holds 21%, Google Cloud 14%. Global enterprise cloud spend reached $129 billion. John Dinsdale, chief analyst at Synergy, said Amazon is still in front, but Microsoft and Google are posting faster growth.
Nvidia is still at the heart of the trade. Its chips power most of the AI expansion, so it’s a Microsoft partner but could become a squeeze point if there’s a supply crunch or costs go up. Microsoft shares fell Monday. Nvidia gained 1.7%. Amazon and Alphabet traded lower in the afternoon.
Microsoft has scale, a lot of customers and strong cash flow, which investors tend to want. What’s less clear is whether AI will turn into a business that grows, but at lower margins and with growing needs for fresh capital.
That puts the stock in a tight spot. Wells Fargo’s case looks better if Copilot, Azure AI and Microsoft’s own models keep pulling in big enterprise deals. But if spending keeps outpacing the gains from monetization, the Hold side might be right.
