MSFT
The selloff wasn’t the whole story
Microsoft just took a hit from CapEx nerves, but this note argues the market may be overdoing it. The stock’s been punished like it forgot to do its homework, yet the setup here is basically: buy the dip, because the AI spend binge may be cooling off.
Why bulls are circling back
The big tell is management’s guidance for a sequential decline in Q3 2026 CapEx. Translation: the company isn’t saying, “No more spending.” It’s saying, “Okay, the bill is getting a little less spicy.” That matters because investors have been treating the AI infrastructure race like an endless cash bonfire.
And there’s still a growth engine humming in the background. Azure demand is reportedly outstripping supply, which is a very polite corporate way of saying customers want more cloud than Microsoft can currently hand them. New data centers should help, and the note points to roughly 38% growth staying in the mix.
The investor takeaway
This is the classic “expensive now, dominant later” trade. If CapEx normalizes while Azure keeps growing like a teenager on a protein shake, the stock can keep its premium. Big picture: Wall Street isn’t telling you Microsoft is cheap — it’s telling you the growth machine may still be underpriced.