Microsoft at AI Crossroads: Growth Prospects Under Pressure

Microsoft remains a high-quality business, but AI-driven change is pressuring cloud dynamics, Copilot traction, and mature markets. Key risks include cloud price/mix competition, uncertain payback on AI infrastructure capex, and potential erosion of productivity software value from new developer tools. Valuation suggests modest undervaluation (around $443.7 per share) with only about 56.8% odds of beating the current price, implying limited upside relative to risk. Overall, the article recommends holding Microsoft as an AI player that hasn’t shown a clear edge over peers, despite aggressive data-center expansion.