12 AI News Investors Probably Missed

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, improving operations and security while heavily investing in AI advancement.

UBS analyst Karl Kierstead reiterated a Buy rating on Microsoft (MSFT) with a $525 price target, noting the stock’s slight 2% dip after DeepSeek’s announcement aligns with Microsoft’s strategy. The company’s decision not to fund OpenAI’s GPU compute targets and focus on building inference infrastructure for enterprise customers is seen as a strategic pivot. While Microsoft’s heavy investment in OpenAI now faces rising competition, its capex growth may slow after FY25 if AI becomes less compute-intensive. Investor sentiment could improve if Microsoft highlights capex discipline and ROI during its upcoming updates. Kierstead noted:

“That ‘bet’ looks like a clever one. While Microsoft has made a very large singular bet on OpenAI, which now faces heightened competition, the pace of Microsoft’s capex growth could slow beyond FY25 if, in fact, AI becomes LESS compute-heavy. Investor sentiment might even improve post Wednesday’s print if Microsoft explains that their StarGate/OpenAI decision was about capex discipline, restoring investor confidence in their capex growth and ROI outlook.”