Microsoft's Bear Case is Overblown

Dow Jones00:03

1203 ET - Deutsche Bank isn't so worried about the bear case for Microsoft that has pressured shares ahead of the company's 4Q earnings. Investors have concerns about rising prices for memory and other components, returns on artificial-intelligence investments, and concentrated exposure to OpenAI. "While all valid concerns, we believe fears around each of these areas have become overblown and are more fully reflected in shares now," they write. Microsoft has levers to offset higher component costs, including a strong pricing environment for AI infrastructure. They expect attractive returns on AI spending and note that even if OpenAI's contracts need to be reallocated, overall AI infrastructure demand remains strong. Shares rise 1.3%. (elias.schisgall@wsj.com)

(END) Dow Jones Newswires

July 20, 2026 12:03 ET (16:03 GMT)

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