Microsoft Corporation NASDAQ: MSFT announced that prices for its popular Xbox gaming console will increase due to rising development costs associated with tariffs. The news, while logical, shows that technology stocks aren't completely insulated from the current tariff problems besetting the broader economy.
Microsoft (MSFT) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
Nvidia's (NVDA -0.64%) biggest customers reiterated their plans to spend big on artificial intelligence.
Microsoft has a new, two-year rehire ban on employees who are ousted due to performance issues. It's also embracing an infamous Amazon approach that treats some employee attrition as "good.
Microsoft's strategy to install artificial intelligence (AI) as a default feature on its software may be paying off.
Over the past two weeks, most of the Magnificent 7 have reported earnings, and the results were broadly positive, reinforcing the strength and scale of these market leaders. Last week brought reports from Amazon ( AMZN ), Apple ( AAPL ), Meta Platforms ( META ), and Microsoft ( MSFT ), while the prior week featured Alphabet ( GOOGL ) and Tesla ( TSLA ).
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Like most megacap growth stocks, Microsoft (MSFT 2.31%) had been down big year to date due to a widespread sell-off, tariff turmoil, and recession fears. But Microsoft and other growth stocks have recovered in recent weeks.
Only one "Magnificent Seven" stock lagged the performance of the S&P 500 (^GSPC 1.47%) last year, and that was Microsoft (MSFT 2.31%). However, after reporting strong fiscal Q3 results and issuing upbeat guidance, the software giant is well on its way to having a better 2025.
MSFT and META both reported blockbuster earnings this week, fueling hopes of a potential Big Tech resurgence. At the same time, S&P 500 companies have seen the sharpest decline in earnings outlook since the Covid-19 pandemic in 2020 amid drastic decreases in CAPEX. Recent economic data indicates that the full effects of tariffs have yet to materialize, which has helped support equity markets over the past week.
The past few years have been a whirlwind for Nvidia (NVDA 2.33%) investors. The onset of the artificial intelligence (AI) revolution led to scorching demand for the graphics processing units (GPUs) that make AI possible.
Microsoft reported strong Q3 FY2025 results, driven by reaccelerated growth in its cloud and AI business, particularly Azure, sending the stock 7% higher. Despite global trade tensions, MSFT's cloud business remains resilient, with Q4 FY2025 guidance pointing to continued sequential growth acceleration. Its AI capex outlook remains strong, with guidance for higher spending in FY2026, although growth is expected to be slower on a YoY basis, easing concerns about overspending.