Microsoft Q3 Preview: Why I See Upside Ahead
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Brendan O'Boyle2.91K FollowersFollow5ShareSavePlay(9min)Comments(2)Follow us on Google for the latest stock newsFollow Seeking Alpha on Google for the latest stock newsSummaryMicrosoft is reiterated as a Strong Buy following a Q2 selloff on CapEx fears that presents buyers with a compelling entry point toward a 12-month target price of $600/share.The CapEx fever is breaking, with management guiding for a 'sequential decline' in Q3 2026 CapEx as spending normalizes.At present, Azure demand outstrips supply, with new data centers ensuring a continuing rapid growth trend (~38%).The investment thesis centers on MSFT’s liquidity, manageable legal risks, and upside from AI catalysts, with a potential OpenAI IPO providing a lift for shares in late 2026.
Getty Images In January, I addressed the $134 billion misunderstanding surrounding Elon Musk's lawsuit against OpenAI and Microsoft (MSFT), rating the latter a Strong Buy. This was based on Microsoft's capped exposure to the lawsuit (~$25B) that appeared very manageableThis article was written byBrendan O'Boyle2.91K FollowersFollowBrendan, a Pennsylvanian by birth:-Completed a Ph.D. at Stanford University in the field of organic synthesis (2009). -Worked for a major pharmaceutical company (Merck, 2009-2013).-Worked in biotech including start-ups (Theravance/Aspira) prior to securing employment at Caltech.-First employee and co-founder of 1200 Pharma as it spun out of Caltech garnering major investment (into the 8 figures).-Remains an avid investor, focused on market trends and especially biotechnology stocks.Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. The author is long MSFT but may add to the position or sell cash-secured puts before or after the Q3 earnings report.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.