Gotrade News - Microsoft (MSFT) shares came under pressure after Oppenheimer Holdings cut its price target to $515 from $630 on AI capital expenditure concerns. The downgrade landed alongside a broader AI sector selloff that pushed Nasdaq futures lower on Monday.
According to Watcher Guru on Monday (28/04), Oppenheimer flagged that Microsoft is yet to see returns commensurate with its AI investment. The firm warned that AI spending is consuming a larger share of the cost base than the company can comfortably absorb.
--- - Oppenheimer cut Microsoft's price target to $515 from $630 on AI capex and return concerns - Nasdaq 100 E-Mini futures fell 0.93% as OpenAI revenue miss reignited AI bubble fears - Motley Fool framed Amazon as the better AI buy, citing AWS momentum and Microsoft Copilot adoption gaps ---
The new target sits well below the prior $630 level and implies further downside from already-pressured trading prints. Microsoft has now declined roughly 22% over the last six months as the AI capex narrative has soured.
According to Watcher Guru on Monday (28/04), Microsoft's $120 billion AI capex commitment has made the stock vulnerable to Wall Street sentiment shifts. The note specifically raised concerns that the company might have gone too far on capital spending.
June Nasdaq 100 E-Mini futures (NQM26) fell 0.93% in the same session as AI investment concerns resurfaced. Semiconductor and cloud names led the slide, with Oracle off about 4% and CoreWeave down roughly 5% in premarket trade.
According to Barchart on Monday (28/04), Arm Holdings dropped about 8% while AMD and Broadcom slid 4% and 3% respectively. The Federal Reserve also began a two-day FOMC meeting with rates widely expected to stay in the 3.50% to 3.75% band.
The OpenAI angle added a separate layer of pressure on hyperscaler narratives. The Wall Street Journal reported that the ChatGPT developer missed several monthly sales targets in 2026 and fell short of internal user goals.
According to PYMNTS on Monday (28/04), CFO Sarah Friar warned that OpenAI may struggle to fund future computing contracts if revenue does not grow fast enough. The board has reportedly begun scrutinizing OpenAI's data center commitments amid slowing business momentum.
That dynamic feeds directly into Microsoft's exposure given its role as OpenAI's primary cloud partner. Any pullback in OpenAI compute demand would weigh on Azure capacity utilization assumptions baked into Microsoft's capex plan.
Motley Fool drew an explicit Microsoft versus Amazon comparison and framed Amazon as the better AI investment. The piece cited stronger near-term monetization and broader infrastructure leverage at AWS.
According to Motley Fool on Monday (28/04), AWS hit a $15 billion annual revenue run rate for AI services in Q1 2026. Amazon is also projected to spend roughly $200 billion in capex this year, with CEO Andy Jassy publicly defending that spend.
Microsoft Azure cloud revenue rose 26% year-over-year, with Azure services up 39% in the most recent quarter. The article still characterized Microsoft as a laggard in the AI race despite that growth pace.
Reported Copilot adoption sits at roughly 3% of the company's commercial Office customers buying Microsoft 365 Copilot licenses. The slow uptake feeds the bear case that monetization lags the scale of capex deployed.
Microsoft trades at a P/E of about 26.6 against Amazon at 36.8, leaving the valuation gap as a key debate point. Investors weighing the two names are essentially choosing between cheaper growth and faster AI revenue capture.
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