Key facts
- Microsoft unveiled seven new in-house AI models at its Build 2026 conference.
- The new models are designed for fine-tuning and cost optimization.
- Microsoft reported Q3 EPS of $4.27, beating estimates of $4.06.
- Q3 revenue was $82.89 billion, up 18.3% year-over-year.
- CEO Judson Althoff sold $7.1 million in Microsoft stock.
Microsoft (MSFT) stock was trading at $431.16, up 0.9%, following its Build 2026 developer conference. At the event, the company unveiled seven new in-house AI models, including MAI-Code-1 and MAI-Thinking-1, aimed at fine-tuning and cost optimization. This move signals a reduced reliance on external AI providers like OpenAI and Anthropic. TD Cowen maintained its Buy rating and $540 price target, citing these AI developments and the company's strategy. Microsoft also announced Microsoft Scout, an agentic AI personal assistant, and a deeper partnership with Nvidia for AI PCs and Azure infrastructure. The company's Q3 earnings exceeded expectations, with EPS of $4.27 and revenue of $82.89 billion, an 18.3% year-over-year increase. Analysts remain largely bullish, with a consensus price target of $561.20. However, CEO Judson Althoff sold $7.1 million worth of stock, and some investors are concerned about the pace of AI infrastructure spending and its return on investment. Microsoft also announced its Majorana 2 quantum chip, with systems expected by 2029.
Outside the tech industry's optimistic pronouncements, a backlash against AI is growing. A Pew poll found only 10 percent of Americans are thrilled about AI's future, and an NBC poll indicated 80 percent of registered voters believe neither major party is handling AI well. Similarly, 80 percent of white-collar workers surveyed in March reported refusing to use mandated AI tools, with 54 percent bypassing company AI in the last 30 days. Data center protests are also increasing, with at least 48 projects blocked or delayed in 2025. For instance, local opposition in Utah forced VC investor Kevin O'Leary to downsize a planned data center. Politicians are beginning to propose regulatory actions, including Senator Bernie Sanders advocating for a 50% public stake in AI companies, Andrew Yang proposing an AI tax, and President Trump signing an AI regulation executive order. New York State legislators sent a one-year data center moratorium to the governor.