Zero ”Sell ratings”.
That’s unusual.
What’s more unusual is what the stock has done while Wall Street has been this confident.
Over the past year, Alphabet gained 69%. Amazon gained 21%. Microsoft fell.
You could explain that away if Microsoft’s business had fallen behind too.
But:
→ Azure kept growing.
→ Earnings kept beating expectations.
→ Microsoft’s contracted revenue surged.
→ And analysts kept their Buy ratings.
So we have three hyperscalers riding the same AI boom, two stocks that took off — and one that Wall Street still thinks has some catching up to do.
Here is the story.⇩
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42 Straight Sells. Zero Buys. So Where Is the AI Money Going?
Nvidia insiders sold $1.8 billion in stock in a single year, according to the report.
One man isn’t abandoning AI he’s looking beyond the infrastructure trade to a mystery cybersecurity company already used by 70% of the Fortune 100.
Same Boom. Very Different Charts.
Alphabet GOOG ( ▲ 0.55% ) and Amazon AMZN ( ▼ 0.37% ) rallied.
Their cloud businesses gave investors plenty to work with. Google Cloud grew 82% in Q2, while AWS accelerated 37%, its fastest growth in 18 quarters.
The strange part: Microsoft MSFT ( ▲ 0.87% ) has been participating in the same cloud and AI spending cycle — just without the same enthusiasm showing up in its share price.
And even on a YTD basis, the contrast is hard to miss:
→ Microsoft’s 2.3% gain trails the S&P 500’s 13.3% by roughly 11 percentage points.
That’s what makes Microsoft interesting here.
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A new type of AI called “Accelerated AI” is about to take the world by storm…
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The Recent Bounce.
The stock has already made up some ground.
It has bounced +25.94% from its July low, but still sits below both consensus target (+15% upside) and the street-high target (+74% upside).
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Just months ago, OpenAI was in line to become the next $1 trillion AI juggernaut.
This week, it has been deemed “a bloodbath.”
OpenAI sales goals are on pace to fall short by 90%.
That’s a big problem for Sam Altman to fix.
However, it’s an even more urgent catastrophe for the publicly-traded companies that have struck deals with OpenAI.
In other words, companies who have invested hundreds of billions upfront for a promise that OpenAI will pay them back once it’s profitable.
Already, the dominoes are falling…
Share prices of OpenAI’s partners have crashed as much as 30% since last month.
Goldman Sachs says there are “signs of panic” among companies lending money to AI firms, like OpenAI.
Here’s what you must understand today:
The companies primed to crash as OpenAI’s contagion spreads are likely in your portfolio, with one blue-chip tech stock set to fare the worst.
I reveal the name and ticker of that company to sell right here in this video.
Near-Unanimous↓
✱ Zero Sell ratings among 57 analysts covering the stock is a genuinely unusual level of consensus.
Recent revisions have skewed toward upgrades rather than cuts — meaning this bullishness held through a full year of price weakness, not just after the recent bounce.
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The Bull Case.
So, What Does Wall Street See?
→ $678B — Already contracted
Microsoft’s commercial backlog surged 84% to $678 billion. That’s revenue customers have committed to, but Microsoft hasn’t recognized yet — giving the company an unusually large window into future demand.
→ $100B — Azure is monetizing it
Azure crossed $100 billion in annual revenue for the first time, while Microsoft 365 Copilot passed 30 million paid seats. AI demand is increasingly showing up as actual revenue and subscriptions.
→ $133.75B — Profits are following
FY26 net income climbed 31.34% to $133.75 billion, giving bulls evidence that Microsoft’s enormous infrastructure spending is producing earnings alongside the growth.
Backlog. Monetization. Profit. That’s the argument behind those 54 bullish ratings.
And Then There’s The $870 Call.
!!! Analyst opinion — not a TradingLessons recommendation
Arete Research sits at the far end of the bullish camp with a $870 price target — roughly 76% above Microsoft’s current price.
The thesis assumes Azure AI keeps expanding as businesses move AI workloads from experimentation into everyday operations, while Copilot adoption continues across the enterprise.
That’s a lot of execution baked into one target.
Microsoft wouldn’t get there on the strength of another good quarter.
The $870 case requires Azure, Copilot, and AI monetization to keep delivering for years.
Source: Arete Research
Now For The Part The Bulls Need To Prove…
✱ Microsoft has the growth. The next question is whether all that AI spending can translate into more cash.
1 The bull case
— Azure stays above 40% growth for another quarter or two
— Copilot keeps adding paid seats
— Capex growth begins to moderate
— The $678B backlog starts showing up more clearly in free cash flow
2 The bear case
— Azure begins to decelerate
— Copilot adoption starts leveling off
— AI infrastructure produces lower returns than expected
— Heavy capex continues weighing on cash generation
And here’s the number that keeps this from being an easy bull case:
→ Net income: +31%
→ Free cash flow: -6.46%
Microsoft is earning substantially more on paper while generating less free cash after its enormous infrastructure spending.
For the bulls, that’s the temporary cost of building AI capacity ahead of demand. For the bears, it’s exactly the number worth watching.
The $678 billion backlog looks impressive. Turning it into more cash is the next test.
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