Microsoft Corporation (NASDAQ:MSFT) shares are in the spotlight Tuesday after a busy stretch that included a fresh round of layoffs, a shift toward the company’s own AI models and a wave of analyst activity — all ahead of fiscal fourth-quarter earnings later this month.
- Microsoft shares are retreating from recent levels. Why is MSFT stock falling?
The Layoffs
Last week, Microsoft announced plans to lay off approximately 4,800 employees, offering up to 39 weeks of severance to most affected U.S. workers. The Xbox gaming division was hit particularly hard, with the company eliminating around 3,200 jobs — roughly 20% of its staff — as part of a broader reorganization aimed at spurring growth in the struggling gaming business. Reports also indicate the company could cut up to 5,700 additional jobs across sales, consulting, and Xbox in the coming weeks as Microsoft continues redirecting resources toward artificial intelligence.
Replacing OpenAI With Its Own Models
Separately, Bloomberg reported that Microsoft is replacing OpenAI and Anthropic models with its own internally built MAI models in products including Excel and Outlook. Tens of thousands of AI prompts in those applications are now being completed each week using Microsoft’s in-house technology — a scale of usage that hadn’t been previously reported. The shift reflects Microsoft’s broader effort to reduce reliance on costly third-party AI models as the company works to build competitive alternatives at a lower cost.
Analyst Consensus & Recent Actions
The stock carries a Buy rating with an average price target of $552.96. Recent analyst moves include:
- Argus Research: Buy (Lowers Target to $510.00) (July 10)
- BMO Capital: Outperform (Raises Target to $515.00) (July 7)
- Wolfe Research: Outperform (Lowers Target to $525.00) (July 6)
Looking Ahead to Earnings
Microsoft is expected to report fourth-quarter earnings on July 29. Analysts estimate earnings per share of 4.23, along with revenue of $87.61 billion.
Microsoft Shares Edge Lower
MSFT Price Action: At the time of publication, Microsoft shares are trading 3.07% lower at $379.00, according to data from Benzinga Pro.
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