Microsoft Corp. (NASDAQ:MSFT) has tumbled nearly 23% this year, shedding its untouchable status, but Futurum Equities’ strategist Shay Boloor is buying the dip, arguing Wall Street’s hyper-fixation on AI spending is blinding it to massive underlying growth.
Voting Against Short-Term Fears
Microsoft’s stock has faced relentless pressure as investors panic over massive capital expenditures. However, Boloor recently initiated a trade in the “former market darling,” arguing that Wall Street is “significantly overselling” Microsoft.
He attributes the recent sell-off to short-term fears regarding expensive AI infrastructure, GPU spending, and declining free cash flow.
Calling it a classic example of the voting machine versus the weighing machine, Boloor notes investors are punishing the stock today while ignoring the durable earnings power expected by 2027 and 2028.
Unignorable Fundamentals
Despite the stock’s dismal year-to-date performance, the company’s core engine is accelerating. Overall revenue grew 18% year-over-year, and earnings per share expanded by 23%—meaning EPS is successfully outpacing revenue growth despite the heavy investments.
Most notably, Microsoft’s cloud segment surpassed $54 billion, with Azure soaring by 40%. Boloor points out that Microsoft possesses “one of the strongest enterprise distribution moats in all of technology.”
Rather than convincing companies to adopt brand new platforms, Microsoft is seamlessly embedding AI into everyday tools like Outlook, Excel, and Teams. This strategy brilliantly shifts the company from merely monetizing users to successfully “monetizing work.”
The Copilot Scale And OpenAI Nuance
While some consider Copilot adoption disappointing, Boloor notes the platform already boasts over 20 million paid seats. As this scales, it transforms into a highly lucrative revenue layer.
Finally, Boloor addressed the OpenAI concentration risk. While acknowledging the vulnerability, he views the updated partnership as a “huge win” that allows Microsoft to retain vital IP rights through 2032 while redirecting capital toward its own internal AI infrastructure and Azure models.
How Has MSFT Performed In 2026?
MSFT shares have plunged 22.88% YTD, up 10.35% over the last month, and 25.02% over the year. The stock closed 5.71% higher at $372.97 apiece on Friday, and it was 1.77% higher in premarket on Monday.
Benzinga’s Edge Stock Rankings indicate that MSFT maintains a weak price trend in the short, long, and medium terms, with a solid quality score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
Login to comment