For a while there, the AI PC revolution looked like it might be good news for tech giant Microsoft (MSFT). With Windows 10 coming into end of life—no matter how loudly Windows 10 users objected—it was a great time to offer PCs with serious upgrades. And inserting artificial intelligence (AI) into those PCs seemed to be a great way to bring in more interested upgraders. But the sales so far have not been the best, and partners are growing concerned. Investors are growing concerned as well, based on the fractional slip in Microsoft shares that hit during Friday afternoon’s trading.
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This word came from Dell Technologies (DELL), one of the biggest PC makers out there. Jeff Clarke, Dell’s vice chairman and chief operating officer, delivered some remarks at CES 2026 that should have Microsoft’s blood run cold. Clarke noted that Dell had “…an expectation of AI driving end-user demand.” But, Clarke also noted, “…it hasn’t quite been what we thought it was going to be a year ago.”
It got worse, as Kevin Terwilliger, Dell’s head of product, noted “What we’ve learned over the course of this year, especially from a consumer perspective, they’re not buying based on AI. In fact, I think AI probably confuses them more than it helps them understand a specific outcome.” Worse, many of the AI applications we see running right now do not require a new PC to run at all; someone with a Windows 10 PC can still go to ChatGPT, Grok or Claude and ask it what it thinks of Pennywise the clown somehow getting in a fight with Pinhead of Hellraiser fame.
“Major Updates”
Meanwhile, Microsoft is making another move that suggests the move to bring in PC gaming to Xbox is happening after all. Microsoft is readying a set of new updates to the Windows 11 Full Screen Experience, which will be vital to making a PC that plays like a console.
In fact, we may start seeing these developments emerge before the next Xbox itself actually does. We could be hearing about this at the Game Developers’ Conference 2026 event when it hits in March. That is a good time for it to hit, as reports suggest the Steam Machine is likely to make its appearance sometime in the first quarter of this year.
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 32 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 14.12% rally in its share price over the past year, the average MSFT price target of $631.01 per share implies 32.46% upside potential.
