Oracle and Microsoft Shine as Market Identifies Software Winners and Losers
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 13 2026
0mins
Should l Buy MSFT?
Source: Barron's
Stock Market Dynamics: The stock market is currently navigating a challenging phase influenced by AI advancements, assessing which software companies will thrive and which may struggle.
AI Disruption Impact: The ongoing disruption caused by artificial intelligence is prompting investors to evaluate the future prospects of various software firms.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 370.870
Low
500.00
Averages
631.36
High
678.00
Current: 370.870
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Microsoft Holds Over 27% Stake in OpenAI
- Significant Investment Value: Microsoft owns approximately 27% of OpenAI, and with OpenAI's recent funding round valuing the company at around $852 billion, Microsoft's stake is worth about $230 billion, highlighting its strategic positioning in the AI sector.
- Massive Market Potential: OpenAI successfully raised $122 billion at the end of March, indicating strong demand in private markets, and is expected to go public soon, which could provide Microsoft with additional capital appreciation opportunities.
- Low Valuation for Microsoft: With a market cap of $2.8 trillion, Microsoft's investment in OpenAI accounts for nearly 10% of its total value, while its operating price-to-earnings ratio is at a near-decade low, suggesting investors can buy Microsoft stock at a low price while gaining exposure to OpenAI's potential upside.
- Favorable Investment Timing: Given the current market conditions, Microsoft is viewed as an attractive investment opportunity, and analysts recommend that investors seize this “once-in-a-decade” chance to buy Microsoft shares to capitalize on future growth potential.
See More
Stock Market Resilience Amid Rising Oil Prices
- Market Resilience: Despite WTI crude oil prices rising to $105 per barrel, the stock market showed strong performance on Monday, with the S&P 500 index achieving eight gains in the past nine trading days, reflecting investor confidence and market resilience.
- Iran Situation Impact: President Trump ordered a blockade of maritime traffic to and from Iranian ports, yet optimism remains for a potential deal, leading to further gains in the S&P 500 after Trump announced that Iranian officials expressed a desire to negotiate.
- Tech Sector Outperformance: The technology sector excelled on Monday, driven by strong performances in AI-related stocks, with companies like CrowdStrike, Salesforce, Palo Alto Networks, and Microsoft each rising over 2%, although they are still down more than 10% year-to-date.
- Earnings Preview: Before Tuesday's opening bell, earnings reports from Johnson & Johnson, Wells Fargo, JPMorgan, BlackRock, Citigroup, and CarMax are expected, with the market closely monitoring their potential impact on stock performance.
See More
Stock Price Movements of Various Companies
- Oracle AI Capabilities Boost: At the Customer Edge Summit, Oracle announced that its AI platform helped residential utility customers save $369 million in 2025, leading to a more than 9% increase in shares, indicating enhanced competitiveness in the cloud computing sector.
- Conagra CEO Transition: Conagra announced that John Brase will take over as CEO on June 1, resulting in a more than 5% drop in shares, reflecting market unease over leadership changes, with shares down over 17% in 2026.
- Allogene Therapeutics Clinical Success: The biotech company saw its shares soar nearly 30% after positive phase 2 data showed its CAR T treatment significantly improved cancer cell eradication in lymphoma patients, laying a strong foundation for future product line expansion.
- Goldman Sachs Earnings Beat: Despite its fixed income trading falling short of expectations, Goldman Sachs posted an earnings and revenue beat in its first-quarter report, with shares down over 2%, indicating market caution regarding its future performance.
See More
Software Sector Faces Catastrophic Start to 2026 Amid AI Fears
- Sector Underperformance: As of April 10, the iShares Expanded Tech-Software Sector ETF (IGV) has dropped 30%, indicating severe sell-offs in software-as-a-service (SaaS) stocks due to fears surrounding AI innovations and concerns over high valuations entering 2026.
- Market Rebound Signs: On Monday, despite the broader market being flat, the IGV surged over 4%, potentially triggered by a note from Goldman Sachs that reignited investor interest in software stocks, reflecting a subtle shift in market sentiment.
- Goldman's Value Opportunity: Goldman Sachs highlighted that tech stocks are undervalued relative to expected growth, with software stocks showing significantly lower net debt-to-equity ratios compared to the broader market, suggesting potential investment opportunities in the sector.
- Uncertain Future Outlook: While many software companies view AI as a growth tailwind, the prevailing market sentiment remains volatile, and the software sector is expected to continue experiencing fluctuations; however, buying now may yield long-term returns.
See More
Apple Faces Rapid Growth from Competitors
- Apple's Stagnant Growth: Although Apple's recent quarterly performance was the best in years, its growth rate remains stagnant, with expectations to maintain low single-digit growth, falling short compared to its competitors' rapid expansion.
- Nvidia's Valuation Advantage: Nvidia trades at a PE ratio of 22, nearly 50% lower than Apple's, with projected growth rates of 79% and 85% over the next two quarters, showcasing its strong performance in the GPU market and making it a more attractive investment choice.
- Microsoft's Strong Performance: Microsoft reported a 17% revenue growth in its latest quarter and maintains a leadership position in AI, with expectations for its PE ratio to rebound to 30, indicating a valuation advantage over Apple and potential for strong returns in the coming year.
- TSMC's Growth Potential: As a key supplier to Apple, TSMC anticipates a 25% compound annual growth rate from 2024 to 2029; despite a PE ratio of 27, its robust growth in the AI chip market makes it a compelling investment opportunity.
See More
Q4 Performance Analysis of Software Development Sector
- Industry Overview: The 12 software development stocks reported a collective revenue that exceeded analysts' expectations by 3.5% in Q4, indicating resilience in the sector, with an average stock price increase of 6.1% since earnings reports were released despite market volatility.
- Bandwidth Highlights: Bandwidth reported revenues of $207.7 million, down 1.1% year-on-year, yet its EBITDA guidance exceeded expectations, leading to a 24.3% stock price increase since the earnings report, reflecting market confidence in its future growth.
- Fastly's Strong Growth: Fastly achieved revenues of $172.6 million, a 22.8% year-on-year increase, outperforming analysts' expectations by 6.9%, with its stock soaring 146% since the earnings report, showcasing market enthusiasm for its edge cloud platform.
- Nutanix Challenges: Nutanix reported revenues of $722.8 million, up 10.4% year-on-year, exceeding expectations by 1.8%, but its next quarter guidance significantly missed analysts' forecasts, resulting in a 10.4% stock price decline, indicating market concerns about its growth outlook.
See More
Microsoft Holds Over 27% Stake in OpenAI
- Significant Investment Value: Microsoft owns approximately 27% of OpenAI, and with OpenAI's recent funding round valuing the company at around $852 billion, Microsoft's stake is worth about $230 billion, highlighting its strategic positioning in the AI sector.
- Massive Market Potential: OpenAI successfully raised $122 billion at the end of March, indicating strong demand in private markets, and is expected to go public soon, which could provide Microsoft with additional capital appreciation opportunities.
- Low Valuation for Microsoft: With a market cap of $2.8 trillion, Microsoft's investment in OpenAI accounts for nearly 10% of its total value, while its operating price-to-earnings ratio is at a near-decade low, suggesting investors can buy Microsoft stock at a low price while gaining exposure to OpenAI's potential upside.
- Favorable Investment Timing: Given the current market conditions, Microsoft is viewed as an attractive investment opportunity, and analysts recommend that investors seize this “once-in-a-decade” chance to buy Microsoft shares to capitalize on future growth potential.
See More
Stock Market Resilience Amid Rising Oil Prices
- Market Resilience: Despite WTI crude oil prices rising to $105 per barrel, the stock market showed strong performance on Monday, with the S&P 500 index achieving eight gains in the past nine trading days, reflecting investor confidence and market resilience.
- Iran Situation Impact: President Trump ordered a blockade of maritime traffic to and from Iranian ports, yet optimism remains for a potential deal, leading to further gains in the S&P 500 after Trump announced that Iranian officials expressed a desire to negotiate.
- Tech Sector Outperformance: The technology sector excelled on Monday, driven by strong performances in AI-related stocks, with companies like CrowdStrike, Salesforce, Palo Alto Networks, and Microsoft each rising over 2%, although they are still down more than 10% year-to-date.
- Earnings Preview: Before Tuesday's opening bell, earnings reports from Johnson & Johnson, Wells Fargo, JPMorgan, BlackRock, Citigroup, and CarMax are expected, with the market closely monitoring their potential impact on stock performance.
See More
Stock Price Movements of Various Companies
- Oracle AI Capabilities Boost: At the Customer Edge Summit, Oracle announced that its AI platform helped residential utility customers save $369 million in 2025, leading to a more than 9% increase in shares, indicating enhanced competitiveness in the cloud computing sector.
- Conagra CEO Transition: Conagra announced that John Brase will take over as CEO on June 1, resulting in a more than 5% drop in shares, reflecting market unease over leadership changes, with shares down over 17% in 2026.
- Allogene Therapeutics Clinical Success: The biotech company saw its shares soar nearly 30% after positive phase 2 data showed its CAR T treatment significantly improved cancer cell eradication in lymphoma patients, laying a strong foundation for future product line expansion.
- Goldman Sachs Earnings Beat: Despite its fixed income trading falling short of expectations, Goldman Sachs posted an earnings and revenue beat in its first-quarter report, with shares down over 2%, indicating market caution regarding its future performance.
See More
Software Sector Faces Catastrophic Start to 2026 Amid AI Fears
- Sector Underperformance: As of April 10, the iShares Expanded Tech-Software Sector ETF (IGV) has dropped 30%, indicating severe sell-offs in software-as-a-service (SaaS) stocks due to fears surrounding AI innovations and concerns over high valuations entering 2026.
- Market Rebound Signs: On Monday, despite the broader market being flat, the IGV surged over 4%, potentially triggered by a note from Goldman Sachs that reignited investor interest in software stocks, reflecting a subtle shift in market sentiment.
- Goldman's Value Opportunity: Goldman Sachs highlighted that tech stocks are undervalued relative to expected growth, with software stocks showing significantly lower net debt-to-equity ratios compared to the broader market, suggesting potential investment opportunities in the sector.
- Uncertain Future Outlook: While many software companies view AI as a growth tailwind, the prevailing market sentiment remains volatile, and the software sector is expected to continue experiencing fluctuations; however, buying now may yield long-term returns.
See More
Apple Faces Rapid Growth from Competitors
- Apple's Stagnant Growth: Although Apple's recent quarterly performance was the best in years, its growth rate remains stagnant, with expectations to maintain low single-digit growth, falling short compared to its competitors' rapid expansion.
- Nvidia's Valuation Advantage: Nvidia trades at a PE ratio of 22, nearly 50% lower than Apple's, with projected growth rates of 79% and 85% over the next two quarters, showcasing its strong performance in the GPU market and making it a more attractive investment choice.
- Microsoft's Strong Performance: Microsoft reported a 17% revenue growth in its latest quarter and maintains a leadership position in AI, with expectations for its PE ratio to rebound to 30, indicating a valuation advantage over Apple and potential for strong returns in the coming year.
- TSMC's Growth Potential: As a key supplier to Apple, TSMC anticipates a 25% compound annual growth rate from 2024 to 2029; despite a PE ratio of 27, its robust growth in the AI chip market makes it a compelling investment opportunity.
See More
Q4 Performance Analysis of Software Development Sector
- Industry Overview: The 12 software development stocks reported a collective revenue that exceeded analysts' expectations by 3.5% in Q4, indicating resilience in the sector, with an average stock price increase of 6.1% since earnings reports were released despite market volatility.
- Bandwidth Highlights: Bandwidth reported revenues of $207.7 million, down 1.1% year-on-year, yet its EBITDA guidance exceeded expectations, leading to a 24.3% stock price increase since the earnings report, reflecting market confidence in its future growth.
- Fastly's Strong Growth: Fastly achieved revenues of $172.6 million, a 22.8% year-on-year increase, outperforming analysts' expectations by 6.9%, with its stock soaring 146% since the earnings report, showcasing market enthusiasm for its edge cloud platform.
- Nutanix Challenges: Nutanix reported revenues of $722.8 million, up 10.4% year-on-year, exceeding expectations by 1.8%, but its next quarter guidance significantly missed analysts' forecasts, resulting in a 10.4% stock price decline, indicating market concerns about its growth outlook.
See More
