Microsoft (MSFT) shares edged higher in early trading hours on Tuesday, as the tech giant tries to recover from a weak start to 2026. The stock is down about 26% since the start of the year and remains nearly 34% below its recent high of $481.60, making it the worst performer among the Magnificent Seven so far this year.
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Despite beating estimates in its fiscal second quarter results in late January, the stock has come under pressure due to high AI spending expected to reach $100 billion this year and concerns that Google’s new TurboQuant tech could cut demand for software licenses. Still, TipRanks’ Crowd Wisdom data suggests many investors are treating the pullback as a buying opportunity rather than an exit signal.
Microsoft’s Q2 Earnings Snapshot
Microsoft reported adjusted earnings of $4.14 per share, beating Wall Street estimates of $3.91. Meanwhile, revenue rose 17% year over year to $81.27 billion, also topping expectations. At the same time, cloud demand remained strong, with commercial bookings up 230%, driven by large commitments from OpenAI and Anthropic, along with steady demand for Azure.
Even after the earnings beat, investors appeared worried that demand for AI services is rising faster than Microsoft can supply it, limiting near-term revenue growth. Management also said capital spending will remain elevated as the company builds more data-center capacity, raising concerns about margins in the coming quarters.
What Does TipRanks’ Crowd Wisdom Show?
Despite the recent drop, broader investor behavior tells a different story. Microsoft shows Positive investor sentiment, based on the activity of over 857,000 investors tracked by TipRanks in the recent quarter.
TipRanks’ Crowd Wisdom tool shows that 11.8% of all tracked portfolios currently hold Microsoft, with investors allocating an average of 8.8% of their portfolios to the stock. More notably, portfolio additions have continued, with holdings rising 0.3% over the past seven days and 2.6% over the past 30 days.
Is Microsoft a Good Stock to Buy Now?
Recently, Citi’s analyst Tyler Radke reiterated his Buy rating on MSFT at a price target of $635, predicting an upside of over 77%. He pointed to strong traction in Microsoft’s AI products and steady growth in its cloud business. Radke added that Copilot is emerging as a key driver for the company’s commercial software unit, with adoption picking up quickly and showing the potential to exceed past growth trends.
According to TipRanks, MSFT stock has received a Strong Buy consensus rating, with 33 Buys and three Holds assigned in the last three months. The average Microsoft stock price target is $583.68, suggesting a potential upside of 62.60% from the current level.
