![\"Microsoft](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/06\/microsoft-corporation-logo.png\"){kind=logo}
$385.10 +0.74\u00a0(+0.19%) <\/p>\nMicrosoft Today$385.10 +0.74\u00a0(+0.19%) <\/p>\n
As of 07\/10\/2026 04:00 PM Eastern<\/p>\n
52-Week Range$349.20<\/p>\n
\u25bc<\/p>\n
$555.45<\/p>\n
Dividend Yield0.95%<\/p>\n
P\/E Ratio22.92<\/p>\n
Price Target$559.84<\/p>\n
Microsoft Corp. NASDAQ: MSFT<\/a>\u00a0has taken steps to lessen its reliance on frontier AI models, though it’s not an outright declaration of protest.\u00a0In June, the tech giant launched its own proprietary AI models<\/a> (Microsoft AI or MAI) across select applications in its Office suite.<\/p>\n What this means for the user experience is an open question, but this is a clear\u00a0margin\u00a0play for Microsoft.\u00a0The company\u00a0competes in multiple areas of the AI infrastructure<\/a>\u00a0buildout.\u00a0In a way that makes this move about controlling the\u00a0controllables.<\/p>\n Get Microsoft alerts:<\/p>\n Sign Up<\/p>\n Instead of experiencing death by a thousand cuts from\u00a0OpenAI and Anthropic (i.e., the frontier models),\u00a0Microsoft is trying to widen its existing moat and deliver strong returns on investment (ROI) from its AI spend.\u00a0But will this be sufficient to alter the sentiment towards MSFT, which has declined approximately 20% year-to-date?<\/p>\n Microsoft Expands MAI to Reduce Reliance on OpenAI<\/p>\n Here’s\u00a0the news behind the news. Bloomberg reported that Microsoft is quietly routing some Excel and Outlook\u00a0prompts to\u00a0MAI, its in-house model family, rather than to OpenAI or Anthropic. Tens of thousands of prompts a week are already running on Microsoft’s own tech.<\/p>\n That’s\u00a0still a small slice of total Copilot traffic. OpenAI and Anthropic handle most of it today. But the direction of that travel matters more than the current split, and Microsoft has made its intentions clear.<\/p>\n At Build 2026 in June, Microsoft unveiled seven MAI models, including its first reasoning model, MAI-Thinking-1. The company says it matches Anthropic’s Claude Opus 4.6 on coding tasks. AI chief Mustafa Suleyman put it bluntly: “We pay a lot of money to Anthropic, so our goal is to reduce and ultimately eliminate that cost.”<\/p>\n How Microsoft’s In-House AI Could Boost Profit Margins<\/p>\n For investors,\u00a0an easy way\u00a0to think about this is as follows.\u00a0Copilot\u00a0is\u00a0a $30-per-seat subscription\u00a0that, prior to the MAI\u00a0launch,\u00a0was\u00a0running on top of someone else’s expensive AI model\u00a0by default. Every prompt costs Microsoft money to process, and multiplied across hundreds of millions of Office users, that bill adds up fast.<\/p>\n Owning the model instead of renting it changes the equation entirely. Microsoft\u00a0doesn’t\u00a0need MAI to\u00a0win\u00a0over every customer. It just needs MAI to be good enough for everyday spreadsheet formulas and email drafts, at a fraction of the cost.<\/p>\n That’s\u00a0the\u00a0ROI story. Microsoft\u00a0won\u2019t\u00a0win an AI arms race on raw intelligence.\u00a0But it can compete more\u00a0efficiently\u00a0by\u00a0converting a rented cost center into\u00a0owned\u00a0infrastructure.<\/p>\n Microsoft Uses MAI to Strengthen Its AI Competitive Moat<\/p>\n Microsoft\u00a0chief executive officer (CEO)\u00a0Satya Nadella has\u00a0reportedly said\u00a0he feared Microsoft becoming “the next IBM.\u201d By that, he meant\u00a0a company that\u00a0let\u00a0someone else own the most important layer of technology. MAI is Microsoft’s answer to that fear.<\/p>\n Instead of a single point of AI dependency, Microsoft now runs a three-way hedge. It holds a stake in OpenAI, embeds Anthropic’s Claude in Copilot, and increasingly leans on its own models where the economics make sense. That flexibility is\u00a0arguably a\u00a0bigger moat than any one model’s benchmark score.<\/p>\n It also insulates Microsoft from a ticking clock. Microsoft’s current discounted OpenAI pricing\u00a0won’t\u00a0last forever, and that deal\u00a0isn’t\u00a0set to expire until 2032. Building a credible in-house alternative now gives Microsoft leverage in any future renegotiation, rather than leaving it stuck paying whatever OpenAI or Anthropic decides to charge.<\/p>\n The Bear Case: Risks to Microsoft’s AI Strategy<\/p>\n Before getting too bullish, a few caveats are worth weighing. This shift is still incremental,\u00a0and Microsoft\u00a0hasn’t\u00a0published any timeline for expanding it further. Most Copilot workloads still run on outside models today.<\/p>\n There’s\u00a0also a quality question. Microsoft’s own materials frame MAI as matching prior-generation Anthropic models, not\u00a0necessarily the current large language models (LLMs). If MAI-powered features feel noticeably worse, customer goodwill could take a hit that outweighs the cost savings.<\/p>\n What It Means for OpenAI and Anthropic<\/p>\n This is a warning shot worth watching. Anthropic filed confidentially for an IPO in June, and OpenAI is\u00a0reportedly preparing\u00a0a similar filing. Their biggest enterprise distribution partner is now also a competitor, building cheaper in-house alternatives.<\/p>\n That\u00a0doesn’t\u00a0mean OpenAI or Anthropic are in immediate trouble. Both still handle the bulk of Copilot’s AI traffic, and Microsoft has\u00a0made it clear that\u00a0it\u00a0isn’t\u00a0ending either partnership. But the “picks and shovels” trade just got a little more complicated for anyone betting purely on third-party AI labs staying indispensable.<\/p>\n Microsoft Stock Rebounds After Hitting a 52-Week Low<\/p>\n Microsoft\u00a0hit a 52-week low in late June.\u00a0The 10% bounce off that level\u00a0isn\u2019t\u00a0a sign that everything is perfect, but it does suggest that investors are leaning into the\u00a0stock\u2019s\u00a0value proposition.<\/p>\n At around 22x forward earnings, Microsoft is\u00a0trading at a discount to the S&P 500<\/a>\u00a0and to its own history. An argument could be made that MSFT\u00a0wasn\u2019t\u00a0overvalued\u00a0when the sell-off began in November, and there\u2019s ample reason to believe\u00a0it\u2019s\u00a0undervalued now.\u00a0The relative strength indicator reached oversold territory when MSFT bottomed in June.<\/p>\n But a larger story\u00a0comes\u00a0from analysts and\u00a0institutions.\u00a0The\u00a0MSFT consensus price target of $559.84<\/a>\u00a0is approximately 45% below its recent trading range.\u00a0Plus,\u00a0out of 48 analysts tracked by\u00a0MarketBeat, 41 give MSFT a Buy rating, and seven rate it as\u00a0a Hold.\u00a0Analysts notoriously\u00a0don\u2019t\u00a0like to be wrong, which may explain why some analysts have trimmed their price targets, but the overall sentiment\u00a0remains\u00a0bullish.<\/p>\n The same cautious optimism can be found in\u00a0its\u00a0institutional\u00a0ownership<\/a>.\u00a0There’s\u00a0no question that buying has slowed in the first two quarters of the year. But buying still outpaces selling, and with MSFT at 22x earnings, this could be an attractive target for money that\u00a0hasn\u2019t\u00a0left the market and is looking for\u00a0growth in the second half.<\/a><\/p>\n Before you consider Microsoft, you’ll want to hear this.<\/p>\n MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks<\/a> that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Microsoft wasn’t on the list.<\/p>\n While Microsoft currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.<\/p>\n![\"Stock](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/07\/med_20260709162214_msft2.png\")
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