Microsoft's Next-Gen Xbox Console to Feature AMD Chip
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 11 2026
0mins
Should l Buy MSFT?
Source: Newsfilter
- Next-Gen Console Performance Boost: Microsoft's upcoming Xbox console will feature a custom AMD chip, promising a significant leap in ray tracing performance that enhances realism and immersion, thereby improving player experience and narrowing the gap with competitors.
- Developer Prototype Initiative: Microsoft plans to ship prototypes of the new console to game developers in 2027, aiming to optimize the product through early testing and feedback, ensuring competitiveness in the market, particularly against Nintendo and Sony.
- Management Changes Impact: With the retirement of long-time gaming chief Phil Spencer, AI executive Asha Sharma's appointment signals a renewed commitment to the Xbox business, which may influence future product strategies and market positioning.
- Financial Challenges and Goals: Despite gaming contributing 7% to Microsoft's total revenue last year, Xbox hardware revenue fell by 32%, and the company is pushing for a 30% profit margin in its gaming division, highlighting the financial pressures and strategic adjustments needed in a competitive landscape.
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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: 369.370
Low
500.00
Averages
631.36
High
678.00
Current: 369.370
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.
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- Valuation Metrics Near Lows: Both the price-to-earnings ratio and operating earnings ratio indicate that Microsoft's valuation is approaching decade lows, suggesting that the current stock price may be undervalued, making it an attractive buying opportunity for investors.
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- Shift to Multi-Model Strategy: Recognizing the ineffectiveness of Copilot's reliance on OpenAI models, Microsoft has pivoted to a multi-model agentic approach, introducing new features like Council and Critique aimed at enhancing user experience and strengthening Copilot's competitiveness in the enterprise AI tool market.
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- Nvidia's Market Demand: Nvidia faces demand for its AI computing chips that far exceeds its production capacity, and with a forward P/E ratio of just 20.2, despite projections for data center growth extending through 2030, the stock presents a compelling investment opportunity at this time.
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See More
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- Market Reaction Analysis: The video published on April 4, 2026, highlights investor interest in both companies, particularly in the current economic climate where investors are inclined to favor companies with stronger growth potential.
- Investor Decision Factors: When selecting investment targets, investors must consider factors such as financial health, market share, and future growth potential, as these will directly impact investment returns.
- Future Outlook: Although both companies exhibit solid market performance, investors should closely monitor their financial reports and market dynamics to make informed investment decisions.
See More
