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.