The corporation is facing a number of serious challenges. Huge investments in artificial intelligence do not pay off immediately. This has drawn criticism from investors and led to multibillion-dollar losses.
“Time will tell whether Microsoft Word or Excel can remain relevant in the face of AI’s influence,” noted Jack Ablin, chief investment strategist at Cresset Wealth Advisors, which holds Microsoft shares. “However, current expenses are a cause for concern, especially given that the company is turning to the bond market to raise additional funds, which indicates a lack of internal reserves to sustain growth,” Ablin noted.
Due to aggressive layoffs and a restructuring focused on AI, the quality of support for Microsoft’s traditional products is declining. For instance, the deep integration of AI and cloud services (Copilot) raises questions about data privacy and system vulnerabilities, according to Bloomberg.
Attempts to force new features are meeting with resistance from users, and support for Windows 10 has already been phased out. The lack of plans for a full-fledged Windows 12 is creating confusion in the OS market.
Despite Microsoft’s undervaluation, there are other factors that could fuel optimism. According to consensus analyst forecasts compiled by Bloomberg, the company’s revenue is expected to grow by 17% in the current fiscal year, which ends on June 30. This would mark the fastest growth since 2022 and could accelerate to 18% in 2028 and 20% in 2029.
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