Microsoft’s Puzzle: Record AI Revenue Meets a Thawing Xbox and a Wary Market
15.06.2026 - 03:03:43 | boerse-global.de
Microsoft’s most lucrative division is firing on all cylinders, yet the company’s stock has lost more than a fifth of its value from last autumn’s peak. The disconnect stems from two uncomfortable realities: the staggering cost of building out artificial-intelligence infrastructure and a legacy gaming business that has been a financial sinkhole for 25 years. Chief executive Satya Nadella recently acknowledged that Xbox has never turned a meaningful profit – a candid admission that sets the stage for a radical overhaul.
Xbox’s new head, Asha Sharma, has launched a “100-day reset” alongside content chief Matt Booty. Internal memos warn that the current trajectory “cannot continue”. Over the past five years, excluding Activision Blizzard King, Microsoft poured more than $20 billion into gaming content, platform development and hardware, while annual revenue from the division slipped by roughly $500 million. The unit is now scraping by on a margin of about three per cent – far below corporate standards. Sharma’s initiative aims to reverse that trend, but the market is already pricing in the drag. Meanwhile, a separate June security update consumed significant resources, and further cost-cutting measures, including lay-offs in the gaming division, have done little to reassure investors.
The other side of the story is explosive growth in cloud and AI. In the third fiscal quarter of 2026, total revenue rose 18 per cent to $82.9 billion. Azure expanded at a 40 per cent clip, and AI-related revenue more than doubled year on year to an annualised run rate of $37 billion. Microsoft 365 Copilot now counts over 20 million paying subscribers – a strong performance, though still a tiny fraction of the 450 million commercial users of the broader Microsoft 365 suite. The monetisation of AI features is proceeding more slowly than many had hoped, and the spending required to support that growth is immense. Capital expenditure on AI infrastructure reached $30.88 billion in the quarter, up 84 per cent from a year earlier. For the full calendar year 2026, Microsoft plans to invest roughly $190 billion in new data centres worldwide.
Should investors sell immediately? Or is it worth buying Microsoft?
That level of outlay has made shareholders jittery. The stock, trading at €337.85 in Frankfurt, has fallen about 29 per cent from its October high of €478.10 and is down more than 16 per cent year to date. Technically, the shares remain under pressure: the relative-strength index of 38.2 signals oversold territory, but the price continues to trade below both the 50-day moving average of €352.84 and the 200-day average of €389.03. A break below the support level at €309 could trigger a further sell-off.
Despite the near-term gloom, sell-side sentiment is strikingly bullish. Of the 47 analysts covering Microsoft, 41 rate it a buy. The average price target of $561.20 implies upside of more than 43 per cent from current levels. The immediate catalyst is the Federal Reserve’s interest-rate decision on 17 June, which could shift the macro backdrop for technology stocks. After that, investors will watch for the next quarterly dividend of $0.91 per share, payable on 10 September with an ex-dividend date of 20 August. The real test, however, will be whether Sharma’s 100-day reset can turn Xbox into a cash generator rather than a cash incinerator – and whether the massive AI bet eventually delivers the margins that Wall Street demands.
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Microsoft Stock: New Analysis - 15 June
Fresh Microsoft information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
