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Microsoft is reorganizing how it tells its story by moving the communications department out of the marketing group. The team will now report to Brad Smith, the company's president, as CEO Satya Nadella pushes for a strategy that involves employees more directly in public outreach.
This shift suggests the company wants to move away from traditional corporate marketing and toward a more open, transparent way of sharing its progress. For a company deeply involved in the complex and often scrutinized world of AI, having a more direct and human voice could help it manage public perception and regulatory interest more effectively.
Stifel upgraded the stock to a Buy rating on Wednesday. This move reflects a growing view that Microsoft is successfully turning its heavy spending on AI data centers into steady revenue from corporate customers.
Including this move, the average price target across all major analysts now sits at about $556. This suggests that even after recent gains, many on Wall Street believe the stock has room to rise another 8 percent as the company expands its cloud and AI software business.
Microsoft is adding new capabilities to its Copilot app, including tools for writing code and "agentic" AI, which are tools that can perform tasks on behalf of a user rather than just answering questions. The update also integrates full versions of Office apps like Word and Excel directly into the Copilot interface.
This shift is part of a move toward usage-based billing, where customers pay for how much they actually use the AI rather than just a flat monthly fee. By making Copilot a more capable assistant for complex work, Microsoft is trying to ensure its AI tools remain the default choice for businesses as competition from specialized rivals grows.
Microsoft is laying off about 270 people at its Xbox Game Studios as part of a larger round of cuts across its gaming business. As part of this shift, the company is moving the development of its next Halo game to Activision, the massive game publisher it bought last year.
These cuts show that Microsoft is still working to make its gaming division more efficient after spending 69 billion dollars on the Activision deal. By moving its most famous game franchise to a different internal team, the company is trying to use its new scale to get better results from its biggest brands.
Microsoft has opened a new research center in Maryland where it will give DARPA, the government agency that develops new technology for the military, hands-on access to its quantum hardware. Quantum computing is an experimental field that aims to solve problems far faster than today's most powerful machines. While this technology is still years away from being a major part of the business, working closely with the U.S. government helps Microsoft stay at the center of high-end research. It keeps the company in the lead for potential future defense contracts as these powerful computers become a reality.
Source: Reuters
Management consistently sets a bar they can clear, beating their own numbers for eight straight quarters. This shows a business that is growing faster than even its own bullish forecasts can keep up with.
| Expectation | |
|---|---|
| EPS | $4.71 |
| Revenue | $90.59B |