Key Points
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Investors are increasingly concerned about the capital expenditures of large tech companies for AI infrastructure.
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Wall Street analysts believe the recent sell-off may be overblown, with many seeing significant upside potential.
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Microsoft has spent over $72 billion on capital expenditures related to AI through June 2026, while Oracle’s recent earnings report indicated $450 billion in remaining performance obligations.
Microsoft’s stock has faced a decline despite its strong business model, with 30 out of 33 Wall Street analysts still rating it a buy, and an average price target suggesting a 47% upside. The company reported 15 million paid users for its AI offering, Microsoft Copilot, which remains below expectations.
Oracle, on the other hand, saw its price drop 46% in the past six months, despite a recent earnings report that exceeded estimates and raised its 2027 revenue guidance by $1 billion. Analysts have largely rated Oracle’s stock positively, with a 54% average price target upside, fueled by strong cloud revenue and a large backlog of contracts.
