Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.

Microsoft looks like a high-quality business with very strong profitability, but its current valuation is already noticeably ahead of its fundamental base. Revenue, operating profit, and net income are growing, and margins remain outstanding: operating margin is around 46.8%, and net margin is 40.3%, which is significantly above typical sector levels. ROE, ROA, and ROI are also at very high levels and confirm efficient use of capital, while debt-to-equity is extremely low, which reduces financial risk. The balance sheet is generally solid: equity is growing, assets are increasing, and debt remains moderate, although liquidity is not ideal — the current ratio and quick ratio are below industry benchmarks and have slightly deteriorated compared with last year. Dividend yield remains low and is not a key driver of the valuation premium, so for an investor it is more of an additional than a primary argument. The main limiting factor is valuation multiples: P/S, P/B, and P/FCF are significantly above the industry median, while P/E, although below the industry median, still does not look cheap for a company of such mature scale. At the same time, the trend in P/S and P/FCF shows that the market continues to pay a premium for quality, but such a premium limits the potential for further upside. The decline in cash on hand compared with the peak also slightly cools the picture, although the absolute amount of liquidity remains very large. Overall, the fundamentals support a premium valuation, but not strongly enough to justify aggressive upside in the target price from the current level. For a conservative investor, this means the stock remains an excellent quality asset, but the current price already reflects a significant portion of the business’s strengths.

Microsoft Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, значительно упал. Медведи в растерянности.

Strong index, significantly down. The bears are confused.

Сильный индекс, незначительно вырос. Рынок не поддерживает быков.

Strong index, slightly up. The market does not support the bulls.

Средний индекс, значительно упал. Рынок на стороне медведей.

Medium index, significantly down. The market is on the bears' side.

Слабый индекс, незначительно вырос

Слабый индекс, незначительно упал. Приток средств в шорты остался положительным, но снизился.

Weak index, slightly down. The inflow of funds into shorts remained positive, but decreased.

Microsoft has the strongest profitability and growth, but premium valuation multiples and imperfect liquidity limit the potential for further upward revision.

Key Points
The AI boom is real.
Customer commitments reduce near-term risk, but they don't eliminate long-term uncertainty.
The key question isn't whether AI will transform the economy. It's whether the incremental dollars invested in AI infrastructure will generate an attractive incremental return.
$760 billion. That's roughly how much Amazon (NASDAQ: AMZN), Alphabet, Microsoft, and Meta Platforms are expected to spend on capital expenditures in 2026.
The number is staggering. It's also growing rapidly. The four companies spent roughly $413 billion in 2025, meaning their combined capital spending could jump by more than 80% in just one year.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Much of that spending is going toward the infrastructure needed for artificial intelligence: data centers, servers, GPUs, custom chips, networking equipment, and power capacity.
The bull case is easy to understand. AI demand is exploding and cloud providers can't build capacity quickly enough. But there is another possibility investors should consider. What if the industry is building too much capacity?
That's the risk I think investors should be watching.
The numbers are difficult to ignore
The explosion in demand for AI is real. We don't have to look far to understand that -- just think about how much we engage with ChatGPT to answer our questions, or how much we rely on Gemini or Claude to solve our work problems.
So, there is no doubt that companies must invest to provide these services. But $760 billion for four companies is staggering. In fact, Goldman Sachs forecasts AI investments will exceed $1 trillion in 2026.
And strategically, it makes sense for these big tech companies to invest heavily to gain market share in the AI computing industry. From management's perspective, sitting still could be far more dangerous than spending aggressively. So the companies are racing to build. And that's where the risk begins.
Customer commitments don't eliminate the risk
One of the strongest arguments supporting this spending is that much of the infrastructure already has customers waiting for it.
Amazon, for example, says customer commitments back a substantial portion of its 2026 AWS capital expenditure. Microsoft similarly points to its enormous customer demand.
That's reassuring. But investors should be careful about what these commitments actually mean: Customers want the capacity today. They don't necessarily tell us how much capacity those customers will want five years from now.
That's an important distinction. AI is developing extraordinarily quickly. Models are becoming more efficient. Hardware is improving. Businesses are still figuring out which AI applications will generate genuine economic value. A company can sign a multiyear commitment today and still find that its computing requirements change dramatically over time.
The same thing happened throughout previous technology cycles: Demand forecasts made during periods of rapid adoption can look very different once the technology matures.
A five-year contract may provide visibility. It doesn't provide certainty about the ultimate economics of the AI industry.
The biggest question is asset utilization
Imagine a hotel owner building 1,000 rooms because demand is growing rapidly. If occupancy reaches 95%, the investment looks brilliant. If occupancy eventually falls to 50%, the same building becomes a capital-allocation problem.
AI infrastructure works similarly. Companies are spending enormous amounts of money today to ensure they have enough computing capacity tomorrow. The crucial variable is how intensively that capacity gets used -- and at what price.
If AI demand continues to scale sustainably in the next decade, the returns could be spectacular. But if computing becomes dramatically cheaper, AI models become more efficient, or customers discover that they don't need as much infrastructure as expected, the economics could change.
But the bull case is still powerful
None of this means the AI infrastructure boom is a fake. In fact, there is considerable evidence that the demand is real.
For instance, AWS reported a 37% rise in revenue in the second quarter of 2026 to a $169 billion annualized revenue run rate, the fastest growth in 18 quarters. Similarly, Google Cloud saw revenue surge 82% to $24.8 billion in the same quarter.
In other words, these big tech companies aren't making these investments from weak financial positions. They are reinvesting their profits into the capex, expecting to generate even more profits in the future.
The only question left is whether the investment will earn a sufficiently high return over time.
What does it mean for investors?
I wouldn't bet against Amazon, Microsoft, Alphabet, or Meta simply because they're spending hundreds of billions of dollars on AI. These companies have some of the strongest balance sheets, technology platforms, and customer relationships in the world.
But I also wouldn't assume that every dollar of AI capital expenditure will automatically generate an attractive return. In other words, this is ultimately a capital-allocation issue.
Investors should ask the most important question here: Will the incremental dollars invested in AI infrastructure generate an attractive incremental return five or 10 years from now? That's the number investors can't see yet, but should closely track in the coming quarters.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $567,691!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $62,296!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $409,917!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of September 12, 2026.
Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

The $760 Billion AI Risk That Nobody Is Talking About. But Should.

Key Points
Microsoft's strong rally has returned it to a proper valuation range.
The best time to buy Microsoft has passed.
Microsoft (NASDAQ: MSFT) hasn't been the investment many hoped it would be in 2026. As of this writing, the stock is up by around 2% year to date. However, many investors also opened positions in the stock during the depths of its sell-off in April and June, when it sank by as much as 27%. Investors who bought Microsoft shares then are up more than 30% on their investments and may be quite satisfied.
To pull Microsoft from the depths of those troughs took a major rally, but will that rebound stop short of lifting Microsoft to heights that allow it to outperform the broader market this year?
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Microsoft has an average valuation for a tech stock
Microsoft has its hands in all parts of the tech ecosystem. It has a host of popular software titles that businesses and consumers interact with daily, alongside a thriving cloud computing business and several AI bets. The investment thesis for Microsoft's future revolves primarily around AI and cloud computing, and it is seeing solid results on those fronts.
During Microsoft's latest quarter, its AI assistant, Copilot, reached 30 million paid seats, underscoring its growing role in many companies' AI strategies. Additionally, Azure, its cloud computing platform, surpassed $100 billion in revenue for the fiscal year, accounting for about a third of Microsoft's top line. Furthermore, this division experienced 43% revenue growth, indicating that the hundreds of billions of dollars that Microsoft has been investing in new AI data centers are paying off. Revenue rose at an 18% pace companywide during Q4 of its fiscal 2026 (which ended June 30). That growth rate is about as good as any Microsoft investor could ask for.
So, why is the stock flat for 2026? It all has to do with Microsoft's valuation.
Microsoft wasn't the cheapest stock heading into the year, and the sell-off in the early months of 2026 was due to it not living up to high expectations. Even now, Microsoft trades at 25 times forward earnings, which is pretty much where I'd expect a big tech company to trade.
I think that's a pretty reasonable price to pay for an AI hyperscaler like Microsoft in today's market, although a rally to something like 30 times forward earnings wouldn't be unreasonable either.
The reality is that Microsoft is fairly priced now. The time to buy was a few months ago, when it was changing hands at a discounted P/E ratio. I do think Microsoft will likely outperform the market over the next year due to the company's faster-than-average growth (more than 10%), but the potential for huge returns in the near term has come and gone.
Should you buy stock in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Keithen Drury has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.

Microsoft Stock Is Flat So Far in 2026. Is a Rally Coming to End the Year?

The S&P 500 Index ($SPX) (SPY) on Friday rose by +0.86%, the Dow Jones Industrial Average ($DOWI) (DIA) rose by +0.98%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose by +0.91%. E-mini S&P futures (ESU26) rose +0.83%, and September E-mini Nasdaq futures (NQU26) rose +0.86%.
Stock indexes closed higher, supported by Friday’s -2.4% decline in oil prices. The stock market took Friday’s CPI report largely in stride, even as the 10-year T-note yield closed slightly higher and the odds of a Fed rate hike next week rose to 85%.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Friday’s Aug US CPI report of +0.4% m/m was in line with market expectations, but the core CPI report of +0.3% m/m was slightly stronger than market expectations of +0.2% m/m. On a year-on-year basis, the Aug CPI report of +3.4% y/y was unchanged from July and was in line with market expectations. Meanwhile, the Aug core CPI report of +2.4% y/y eased slightly from July’s +2.5% and posted a new 5.5-year low, and was in line with market expectations.
Friday’s CPI report caused the markets to raise the odds for a +25 bp FOMC rate hike at next week’s meeting on September 15-16 to 88% from 75% on Thursday.
Stocks were undercut by Friday’s weaker-than-expected US consumer sentiment report. The University of Michigan’s preliminary Sep US consumer sentiment index fell by -3.9 points to 47.8, weaker than market expectations for a -0.6 point decline to 51.3.
Also on the negative side, the University of Michigan reported that Sep US consumer 1-year inflation expectations rose to +4.6% from +4.0% in August, stronger than expectations of +4.2%. Sep consumer 5-10 year inflation expectations rose to +3.4% from +3.3% in August, and were stronger than market expectations of +3.3%.
The US-Canada trade war continues to weigh on stock market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by blocking imports of some Canadian products and slapping new tariffs on others, and by seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) fell -2.4% on Friday, reversing part of Thursday’s +6.7% surge to a 3.5-month high. Oil prices still rose by a net +9% on the week, but fell on Friday after the International Energy Agency warned that high oil prices and restricted oil supply will cause the biggest drop in global oil demand this year since the Covid-19 pandemic.
There were reports that two ships were struck by unidentified projectiles near Oman on Thursday, presumably by Iran. Also, Axios reported that Saudi Crown Prince Mohammed bin Salman called President Trump twice on Thursday, asking him to launch a new military attack against the Houthis in Yemen, who are gaining control of more territory in Yemen near the critical Bab el-Mandeb Strait and have been striking Saudi oil facilities. Saudi Arabia told OPEC on Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
Overseas stock markets closed mixed on Friday. The Euro Stoxx 50 closed up +0.90%. China's Shanghai Composite closed down -1.18%. Japan's Nikkei-225 Stock Average closed down -1.91%.
Interest Rates
December 10-year T-notes (ZNZ6) fell by -7 ticks. The 10-year T-note yield rose +0.6 bp to 4.969%, following Thursday’s +11 bp surge to a 2.75-year high of 4.963%. T-note prices found support early in the session from lower oil prices but eventually succumbed to the hawkish CPI report and the higher odds of an FOMC rate hike next week. T-note prices had some underlying support as the 10-year breakeven inflation expectations rate fell -4.4 bp to 2.373%, down from Thursday’s 3.25-month high of 2.42%.
European government bond yields were mixed. The 10-year German bund yield today posted a new 24-year high of 3.532% and ended the day up +0.3 bp to 3.504%. The 10-year UK gilt yield edged to a 19-year high of 5.380% but ended the day down -3.1 bp to 5.343%.
Markets are discounting a 78% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29. The ECB at this week’s meeting raised its deposit facility rate by 25 bp to 2.50%, as expected, and said inflation will stay above 2% for an "extended period."
US Stock Movers
Oracle (ORCL) rallied +5% in Thursday’s overnight session on positive cloud news but then lost those gains and ended Friday down -1.7%. Oracle said late Thursday that its cloud infrastructure sales rose +121% to $7.4 billion, above the market consensus of $7.2 billion. Oracle’s co-CEO Clay Magouyrk said, “We are delivering data center and GPU capacity at a pace that would have seemed impossible only a year ago.” The company also said it sold more than $30 billion in AI cloud contracts during the latest quarter, higher than expectations. Fiscal-Q1 sales rose +30% and the adjusted EPS report of $1.92 per share was higher than market expectations of $1.75.
Chipmakers rose nearly across the board on Friday, and the iShares Semiconductor ETF (SOXX) rallied +1.75% on the day. ON Semiconductor (ON) rallied more than +8%. Analog Devices (ADI), NXP Semiconductors (NXPI), Arm Holdings (ARM), and Marvell (MRVL) all rallied more than +4%.
The Magnificent Seven all closed higher on Friday except for Nvidia (NVDA), which showed a small loss. Amazon.com, Alphabet (GOOGL), and Apple (AAPL) all rallied by more than +1%. Apple found continued support after releasing its new iPhone Duo earlier this week, its first foldable phone.
Microsoft (MSFT) rallied +0.65% after saying it plans a data center push to triple its computing power since a current shortage is forcing it to turn away new AI and cloud business.
Crypto stocks traded higher on Friday, supported by a +3.1% gain in Ethereum (^ETHUSD) and a +0.2% gain in Bitcoin (^BTCUSD). Mara Holdings (MARA) rallied more than +4%, Riot Platforms rallied more than +2%, and Strategy (MSTR)and Coinbase (COIN) rallied more than 1%.
Adobe (ADBE) closed up +1.4% despite slightly disappointing guidance, fueling concerns that AI will cannibalize software revenue.
Dell Technologies (DELL) rallied nearly +12% after RBC Capital Markets started research coverage with an outperform rating and $640 price target based on expectations for strong AI infrastructure demand.
Earnings Reports (9/14/2026)
Liberty Live Holdings (LLYVK).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart

Stocks Shake Off CPI Report and Rally on Lower Oil Prices

Oracle Corporation ORCL is giving cloud behemoths Microsoft Corporation MSFT and Amazon.com Inc. AMZN a run for their money, delivering strong revenues and earnings growth in its latest quarter on the back of continued cloud infrastructure strength. With momentum building, is now the right time for investors to consider ORCL? Let’s explore –
Oracle’s AI-Driven Growth Is Just Getting Started
Given its size, Oracle’s revenue growth has been exceptional. Oracle’s total revenues reached $19.3 billion in the fiscal first quarter of 2027, up 30% year over year, according to the company’s Sept. 10 press release. Oracle’s revenues improved as customers continue to migrate from on-premises software to the cloud.
To put things into perspective, Oracle’s Cloud Infrastructure (IaaS) revenues reached $7.4 billion, representing a 121% year-over-year increase, while cloud applications revenues reached $4.2 billion, up 10% year over year. This mix is promising, as Oracle’s SaaS business provides a steady recurring-revenue base, while the IaaS business positions the company to capitalize on the AI-driven growth opportunity.
Oracle remains optimistic about its revenue growth prospects. The company expects total revenues to increase by 30% to 34% in the fiscal second quarter of 2027 and reach at least $90 billion for the full fiscal year. This target seems achievable, as the company’s remaining performance obligation, or the revenues guaranteed by contracts that have yet to be recognized, reached $664 billion in the fiscal first quarter, up $209 billion year over year.
Additionally, Oracle’s non-GAAP operating income increased to $8.2 billion in the fiscal first quarter, up 31% year over year, driven mostly by strong demand in Cloud Infrastructure and Cloud Applications. With operating income growing much faster than revenues, Oracle is demonstrating that it is not only increasing sales but also becoming more profitable as it grows.
Oracle: Why ORCL Stock Is a Buy After Earnings
As reflected in the latest quarterly results, Oracle’s accelerating cloud and AI-driven growth, strong revenue visibility, and improving profitability provide the company with a solid foundation to grow. Meanwhile, AI infrastructure is becoming Oracle’s primary growth engine as demand for graphics processing units (GPUs) and cloud capacity surges.
Oracle generated $23 billion in operating cash flow in the fiscal first quarter, up 184% year over year. While free cash flow was a negative $5 billion, investors may consider this cash burn as largely attributable to the company’s heavy investments in GPUs, data centers, and AI infrastructure that could drive stronger revenue growth in the future.
Nonetheless, Oracle appears more efficient at generating profits than its industry peers. This is because Oracle’s return on equity (ROE) of 70.2% exceeds the Computer - Software industry’s ROE of 32.4%.
Image Source: Zacks Investment Research
Oracle also appears attractively valued compared with its industry peers. According to the price/earnings ratio, ORCL trades at 19 forward earnings, below the industry’s forward earnings multiple of 25.8.
Image Source: Zacks Investment Research
Therefore, Oracle’s AI-driven growth, robust cash generation, strong profitability, and attractive valuation make ORCL stock an appealing buy for growth-oriented investors. Oracle currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).

Is ORCL a Buy Following 121% IaaS Growth in Q1 Earnings?

Value stocks are significantly outperforming their growth counterparts this year. The Russell 1000 Value Index has returned roughly 23% year to date, compared with just about 4% for the Russell 1000 Growth Index. Meanwhile, the iShares MSCI USA Value Factor ETF (VLUE) has surged more than 47% year to date.
Some investors have favored attractively valued stocks to reduce their exposure to mega-cap concentration amid heightened market volatility. However, value stocks have also benefited significantly from the AI trade.
While investors traditionally look to growth and tech-focused funds for AI exposure, value ETFs have increasingly become direct and indirect beneficiaries of the AI investment cycle.
Multiples for some tech giants at the forefront of AI deployment have compressed as earnings have accelerated, allowing these legacy tech leaders to be picked up by value screens.
Traditionally value-oriented sectors such as industrials, utilities, and materials have also benefited from rising AI spending.
VLUE tracks the MSCI USA Enhanced Value Index, which scores each security for value characteristics relative to peers within the same GICS sector. Micron (MU) is the fund’s largest position, with about a 22% weight, while information technology accounts for roughly 41% of the portfolio.
The iShares Russell 1000 Value ETF (IWD) tracks the Russell 1000 Value Index. At its rebalance in late June, the index added Amazon (AMZN), Apple (AAPL), and Microsoft (MSFT) as its top holdings. The information technology sector currently accounts for about 20% of the index.
The Vanguard Morningstar Value ETF (VTV) holds large-cap US stocks that display strong value characteristics. JPMorgan Chase (JPM), Micron, and Berkshire Hathaway (BRK.B) are its top holdings.
To learn more, please watch the short video above.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Vanguard Morningstar Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
iShares MSCI USA Value Factor ETF (VLUE): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).

Are Value ETFs the New AI Trade?

Key Points
CoreWeave’s backlog grew to $104 billion in its latest quarter.
It expects to convert 75% of that backlog into revenue over the next four years.
More than 75% of its annualized revenue is already locked into those sticky contracts.
CoreWeave (NASDAQ: CRWV), a provider of cloud-based AI infrastructure services, went public at $40 per share on March 28, 2025. Its stock closed at a record high of $183.58 on June 20, 2025, but it now trades at about $90. Three major challenges weighed down its stock.
First, its enterprise value reached $91.1 billion -- or 18 times its 2025 sales -- when its stock hit its all-time high. Second, it struggled to justify that premium valuation as its debt and expenses surged. Lastly, a guidance cut related to data center delays in late 2025 spooked its investors.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
However, I believe CoreWeave is still one of the best recent AI IPOs to buy. Let's see why it still has plenty of upside potential, and why it's worth buying if you can tune out the near-term noise.
How fast is CoreWeave growing?
CoreWeave was once an Ethereum mining company, but it abandoned that business model after the cryptocurrency market's 2018 crash. It subsequently repurposed its GPUs to run AI tasks remotely and rebranded itself as an AI infrastructure company.
CoreWeave only operated three data centers at the end of 2022, but that network now spans 51 data centers across North America and Europe. It's installed more than a quarter of a million Nvidia's (NASDAQ: NVDA) high-end GPUs in those servers to train AI algorithms and process AI tasks. Nvidia also owns an 11.5% stake in CoreWeave, making it one of the company's largest investors.
As a dedicated provider of cloud-based data center GPUs, CoreWeave can process AI tasks roughly 35 times faster and at 80% lower cost than diversified cloud infrastructure platforms like Amazon Web Services (AWS) and Microsoft Azure. That's why its revenue skyrocketed as the generative AI market expanded.
In 2025, CoreWeave's revenue surged 168% to $5.1 billion as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 154% to $3.1 billion. But under generally accepted accounting principles (GAAP), which includes the interest on its debt and depreciation of its equipment, its net loss widened from $863 million to $1.17 billion.
In 2026, analysts expect its revenue to rise 151% to $12.9 billion as its adjusted EBITDA surges 144% to $7.5 billion. However, they expect its GAAP net loss to widen to $2.9 billion.
Why should you remain bullish on CoreWeave?
CoreWeave's bottom-line growth is wobbly. But that isn't surprising, since it's aggressively expanding its infrastructure to meet the AI market's demand for more processing power.
Its contracted revenue backlog expanded 246% year over year to $104 billion at the end of the second quarter of 2026. That's more than eight times higher than its projected 2026 revenue. Its top customers include Meta Platforms, Microsoft, OpenAI, and Anthropic.
During its first-quarter conference call in May, CEO Michael Intrator noted that "more than 75%" of its 2027 annualized revenue target of over $30 billion was locked into contracts. He also predicted that 75% of its backlog would be recognized as revenue within the next four years.
Based on that guidance, analysts expect CoreWeave's revenue and adjusted EBITDA to grow at CAGRs of 80% and 95%, respectively, from 2026 to 2028. At its current enterprise value of $96 billion, it trades at just 7 times this year's sales -- so it could soar a lot higher.
But investors should brace for a lot of volatility
CoreWeave is one of the only high-growth AI stocks I'd consider accumulating right now, but I also expect it to remain volatile for the foreseeable future. Its high debt-to-equity ratio of 14.3 at the end of the second quarter, lack of GAAP profits, and ongoing dilution will make it an easy target for the bears if the Fed hikes its benchmark rates this year to counter inflation.
But if you expect CoreWeave to defend its high-growth niche, grow its backlog, and for its GAAP profits to rise as economies of scale kick in, then it's still a promising long-term investment. Investors just need to brace for significant volatility and be ready to buy even more shares if it crashes.
Should you buy stock in CoreWeave right now?
Before you buy stock in CoreWeave, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Leo Sun has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Amazon, Ethereum, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

CoreWeave Is My Top IPO Pick Right Now: Over 75% of Its Revenue Is Locked In Through Contracts

The S&P 500 Index ($SPX) (SPY) is up +0.89%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.81%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.95%. E-mini S&P futures (ESU26) are up +0.82%, and September E-mini Nasdaq futures (NQU26) are up +0.85%.
Stock indexes are trading higher today, supported by today’s decline of more than -2% in oil prices. The stock and bond markets took today’s CPI report largely in stride. Aug core CPI came in at +0.3% m/m, slightly above market expectations of +0.2%, while nominal CPI was +0.4% m/m, in line with expectations. T-note prices are trading slightly higher, even though the markets raised the odds of a FOMC rate hike next week to 88% from 75% on Thursday.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Today’s Aug US CPI report of +0.4% m/m was in line with market expectations, but the core CPI report of +0.3% m/m was slightly stronger than market expectations of +0.2% m/m. On a year-on-year basis, the Aug CPI report of +3.4% y/y was unchanged from July and was in line with market expectations. Meanwhile, the Aug core CPI report of +2.4% y/y eased slightly from July’s +2.5% and posted a new 5.5-year low, and was in line with market expectations.
Today’s CPI report caused the markets to raise the odds for a +25 bp FOMC rate hike at next week’s meeting on September 15-16 to 88% from 75% on Thursday.
Stocks were undercut by today’s weaker-than-expected US consumer sentiment report. The University of Michigan’s preliminary Sep US consumer sentiment index fell by -3.9 points to 47.8, weaker than market expectations for a -0.6 point decline to 51.3.
Also on the negative side, the University of Michigan reported that Sep US consumer 1-year inflation expectations rose to +4.6% from +4.0% in August, stronger than expectations of +4.2%. Sep consumer 5-10 year inflation expectations rose to +3.4% from +3.3% in August, and were stronger than market expectations of +3.3%.
The US-Canada trade war continues to weigh on stock market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by blocking imports of some Canadian products and slapping new tariffs on others, and by seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) are down more than -2% today, giving back part of Thursday’s +6.7% surge to a 3.5-month high. Oil prices are still sharply higher on the week, but fell back today after the International Energy Agency today warned that high oil prices and restricted oil supply will cause the biggest drop in global oil demand this year since the Covid-19 pandemic.
There were reports that two ships were struck by unidentified projectiles near Oman on Thursday, presumably by Iran. Also, Axios reported that Saudi Crown Prince Mohammed bin Salman called President Trump twice on Thursday, asking him to launch a new military attack against the Houthis in Yemen, who are gaining control of more territory in Yemen near the critical Bab el-Mandeb Strait and have been striking Saudi oil facilities. Saudi Arabia told OPEC on Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
Overseas stock markets are mixed. The Euro Stoxx 50 is up +0.66%. China's Shanghai Composite closed down -1.18%. Japan's Nikkei-225 Stock Average closed down -1.91%.
Interest Rates
December 10-year T-notes (ZNZ6) are up +1 tick. The 10-year T-note yield is down -3.1 bp to 4.932%, following Thursday’s +11 bp surge to a 2.75-year high of 4.963%. T-note prices shook off the CPI report and the higher odds of an FOMC rate hike next week and are trading higher on today’s decline in oil prices. The 10-year break-even inflation expectations rate is down -3.9 bp to 2.378%, falling back from Thursday’s 3.25-month high of 2.42%.
European government bond yields are mixed. The 10-year German bund yield today posted a new 24-year high of 3.532% and is up +1.1 bp to 3.512%. The 10-year UK gilt yield edged to a 19-year high of 5.380% but then backed off and is down -3.2 bp to 5.342%.
Markets are discounting a 78% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29. The ECB at this week’s meeting raised its deposit facility rate by 25 bp to 2.50%, as expected, and said inflation will stay above 2% for an "extended period."
US Stock Movers
Oracle (ORCL) is up +0.6% after reporting late Thursday that its cloud infrastructure sales rose +121% to $7.4 billion, above the market consensus of $7.2 billion. Oracle’s co-CEO Clay Magouyrk said, “We are delivering data center and GPU capacity at a pace that would have seemed impossible only a year ago.” The company also said it sold more than $30 billion in AI cloud contracts during the latest quarter, higher than expectations. Fiscal-Q1 sales rose +30% and the adjusted EPS report of $1.92 per share was higher than market expectations of $1.75.
The positive Oracle news boosted other cloud infrastructure stocks, with Applied Digital (APLD) up more than +2% and Coreweave (CRWV) up more than +1%.
Chipmakers are higher nearly across the board on the positive Oracle news, with TI (TXN), ON Semiconductor (ON), and Analog Devices (ADI) up more than +4%.
The Magnificent Seven are all trading higher today, led by gains of more than +2% in Apple (AAPL) and Alphabet (GOOGL). Apple is seeing continued support after releasing its new iPhone Duo earlier this week, its first foldable phone.
Microsoft (MSFT) is trading slightly higher after saying it plans a data center push to triple its computing power since a current shortage is forcing it to turn away new AI and cloud business.
Crypto stocks are trading higher due to today’s rally of about +2% in bitcoin. Mara Holdings (MARA) is up more than +7%. Strategy (MSTR)and Coinbase (COIN) are up more than +5%.
Adobe (ADBE) is little changed after providing slightly disappointing guidance, which fueled concerns that AI will cannibalize software revenue.
Dell Technologies (DELL) is up more than +10% after RBC Capital Markets started research coverage with an outperform rating and $640 price target based on expectations for strong AI infrastructure demand.
Earnings Reports (9/11/2026)
Kroger Co (KR) and Rent the Runway Inc (RENT).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The artificial intelligence (AI) investment cycle is moving from experimentation to large-scale infrastructure deployment, making capital spending a key indicator for investors in the second half of 2026. The world’s largest technology companies are committing unprecedented amounts of capital to computing capacity, networking, power and cooling. The Bank for International Settlements estimates that the five largest global technology companies will invest more than $1 trillion in AI during 2025-2026.
This spending is increasingly translating into actual infrastructure demand. Alphabet GOOGL has raised its 2026 capital spending outlook to $195-$205 billion, while Microsoft MSFT is planning to more than triple its data-center footprint to about 38 gigawatts by 2032.
Against this backdrop, NVIDIA NVDA, Arista Networks ANET and Vertiv VRT offer exposure to three critical layers of the buildout, which are accelerated computing, networking and power/thermal infrastructure.
Why AI Capex Matters Now
The key question in the second half of 2026 is no longer how much companies are spending on AI infrastructure, but whether that spending is producing sufficient revenues, margins and cash returns.
The spending requirement also extends well beyond GPUs. Higher compute density requires faster networking, greater electrical capacity and advanced thermal-management systems, creating multiple ways to participate in the infrastructure cycle while reducing dependence on a single component of the AI stack.
Amid this, investors should track revenue growth relative to capital intensity, operating-margin expansion, return on invested capital (ROIC) and free-cash-flow (FCF) conversion. These metrics can help determine whether accelerating AI investment is translating into productive growth and attractive returns or simply expanding capacity at the expense of cash generation. With companies now reporting enough 2026 financial data to assess these measures, the second half of the year offers a timely checkpoint for evaluating the durability and quality of the AI capex cycle.
3 Stocks With a Winning Strategy
NVIDIA: The company remains the most direct beneficiary of accelerating AI infrastructure spending. Data Center revenues in fiscal second-quarter 2027 grew 117% year over year, while total revenues climbed 106% year over year.
Our proprietary calculations show the company’s trailing 12 months (TTM) ROIC of 83.5% is well above the 22.7% industry median, showing its exceptional ability to generate returns from the capital deployed in its business. TTM FCF conversion of 65.8% is below its 75.3% median, making cash conversion an important metric to monitor as AI investment scales. Still, NVIDIA generated $69.9 billion of free cash flow in the first half of fiscal 2027, demonstrating substantial cash-generation capacity alongside the AI capex cycle. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks: The company provides a complementary way to benefit from AI capex as rising compute density increases demand for high-speed networking. Second-quarter 2026 revenues rose 37.7% year over year, while the company introduced 1.6-terabit AI fabric platforms designed for increasingly demanding AI clusters.
Going by our proprietary calculations, ANET’s TTM FCF conversion of 127.5% remains robust, but below its 136.6% median, implying strong cash generation relative to earnings. Its TTM ROIC of 27.1% is below the 42.2% industry median but remains broadly consistent with its 3, 5 and 10-year levels. Strong growth, high cash conversion, and expanding AI networking requirements support the stock’s role in the AI infrastructure cycle. This stock also carries a Zacks Rank #1.
Vertiv: The company offers exposure to another critical layer of the AI infrastructure buildout. These are power and thermal management. Second-quarter 2026 sales increased 24% year over year, while adjusted operating margin expanded 410 basis points to 22.6%.
VRT’s TTM ROIC of 26.8% exceeded the 14.9% industry median and has improved significantly from its 16.0% five-year median, indicating strengthening capital efficiency as per our proprietary calculations. Its TTM FCF conversion of 168.9% is also exceptionally high, despite being modestly below its 176.7% median. With AI data centers requiring substantially greater power density and cooling capacity, Vertiv is well positioned to benefit as hyperscalers continue expanding infrastructure. The stock carries a Zacks Rank #2 (Buy).
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AI Capex Creates New Investment Cycle: NVIDIA & 2 Other Stocks to Buy

The emergence of physical AI is likely to create a new market for AI infrastructure providers, and CoreWeave, Inc. CRWV is positioning itself to capture a larger share of that opportunity. The company recently launched Physical AI Field Engineering, an offering designed to help automotive, aerospace, robotics and other engineering teams build, validate and deploy AI throughout the engineering lifecycle.
CoreWeave’s strategy builds on expertise gained from its Monolith AI acquisition, combining engineering know-how, machine learning and infrastructure to turn industrial data into actionable insights. With experience across more than 100 engineering projects in automotive, aerospace and robotics, this expertise could give CRWV an edge as industrial AI adoption grows. The Field Engineering model spans four key areas: identifying engineering problems suited to AI, providing the GPU, storage and simulation infrastructure needed to solve them, transforming real-world engineering data into predictive models and using agentic AI to turn insights into actions. This could enable AI to move beyond analysis toward actively optimizing systems, correcting faults and supporting industrial operations.
CoreWeave’s engagements deliver working AI applications, optimizers and dashboards directly within customers’ workflows, allowing their engineers to operate, modify and retrain the models themselves. The solutions are built on CoreWeave’s infrastructure and use customers’ own data, with physical AI closing the AI loop against real-world hardware rather than user traffic. If physical AI adoption accelerates, CoreWeave could benefit from demand across model training, simulation, synthetic data, inference and continuous model development.
However, competition remains intense. Hyperscalers like Microsoft MSFT Azure have enormous financial resources and global infrastructure footprints, while specialized AI infrastructure providers like Nebius Group N.V. NBIS are competing for the same customers.
CRWV’s Demand Surge Meets Intensifying Competition
NBIS recently partnered with Palantir for AI-native cloud infrastructure. The initiative combines Palantir’s enterprise AI software with Nebius’ AI-native cloud and computing infrastructure. It potentially gives Nebius access to a broader pool of enterprises seeking secure, controllable AI infrastructure while reinforcing its position as a major neocloud player. Under the agreement, Nebius will provide AI compute and inference infrastructure to Palantir’s commercial customers. NBIS expects connected power capacity to reach roughly 800 MW to 1 GW by the end of 2026, fueled by the rapid expansion of AI computing demand. To strengthen its position in the rapidly evolving AI cloud market, NBIS inked an agreement to acquire Eigen AI.
Microsoft is capitalizing on AI business momentum and Copilot adoption while accelerating Azure cloud infrastructure expansion. Its AI investments are converting into measurable commercial traction across its stack. Multi-model flexibility, paired with continued access to OpenAI's frontier models under an IP arrangement extending to 2032, allows customers to optimize cost and performance while keeping Microsoft central to their AI infrastructure decisions. With demand still outpacing available capacity, this positioning across AI infrastructure, tooling and applications should continue widening Microsoft's addressable opportunity heading into fiscal 2027. However, Microsoft’s AI and cloud buildout is consuming a larger share of company resources.
CRWV’s Price Performance and Estimates
Shares of CoreWeave have gained 24.4% year to date against the Internet Software industry’s fall of 0.6%.
Image Source: Zacks Investment Research
On a price-to-book basis, CRWV’s shares trade at 7.94X, higher than the Internet Software Services industry’s 4.89X.
The Zacks Consensus Estimate for CRWV’s current-year earnings has been revised downward over the past 60 days.
Image Source: Zacks Investment Research
CRWV currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CoreWeave Doubles Down on Physical AI: Can CRWV Capture More Demand?

International Business Machines Corporation IBM is expanding its quantum computing footprint by establishing a new quantum innovation hub at ETH Zurich in collaboration with Lockheed Martin Corporation LMT. The project plans to bring an IBM Quantum System Two to the Swiss National Supercomputing Centre in Lugano.
Under an offset agreement with armasuisse, Switzerland’s Federal Office for Defense Procurement, IBM will operate the quantum computer, powered by its Quantum Nighthawk processor. The system will support research in areas such as chemistry, materials science, optimization and financial services, while giving Swiss businesses, startups and academic institutions access to its quantum computing technology. The company will also support quantum education through courses, certifications, workshops and hackathons.
IBM’s collaboration with Lockheed Martin will further explore quantum technologies for aerospace and defense applications. Two planned joint development projects will examine quantum sensing for navigation and improvements in additive manufacturing involving metallic alloys. These initiatives combine the company’s expertise in quantum computing and artificial intelligence (AI) with Lockheed Martin’s capabilities in quantum sensing and advanced manufacturing.
The venture also strengthens IBM’s long-standing relationship with ETH Zurich and supports a new 10-year effort to develop foundational algorithms for AI and quantum computing. These developments reflect the company’s ongoing efforts to advance quantum computing and AI technologies.
How Are Competitors Advancing in Quantum Computing?
IBM faces competition from Microsoft Corporation MSFT and Alphabet Inc. GOOGL. Microsoft is strengthening its quantum computing research through collaborations to explore new approaches to quantum technologies. The company is working to identify potential applications of quantum computing in areas such as chemistry, materials science and optimization. Microsoft is developing quantum technologies to solve complex problems that are difficult for traditional computers.
Alphabet is expanding its quantum computing research through Google Quantum AI, focusing on technologies that can improve quantum systems' performance. The company is exploring quantum computing applications in areas such as optimization, simulation and advanced scientific calculations. Alphabet is collaborating with universities and research organizations on quantum computing projects.
IBM’s Price Performance, Valuation & Estimates
IBM shares have lost 8.9% over the past year against the industry’s growth of 193.3%.
From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.04, below the industry average of 4.72.
Earnings estimates for 2026 have declined 0.7% to $12.33 over the past 60 days, while the same for 2027 have decreased 1.9% to $13.22.
Image Source: Zacks Investment Research
IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Periodand min./max. price, $	Price change, %		Volatility, %		Volume, $
Periodand min./max. price, $	MSFT	Industry	MSFT	Industry	Volume, $
Yesterday 492.6 - 499.0	-1.93	5.21	2.14	1.13	4.93B
Week 486.0 - 511.0	-4.69	4.65	2.44	6.14	28.24B
Month 477.2 - 517.8	-1.45	9.14	4.92	14.24	144.41B
3 Months 349.2 - 517.8	24.18	18.80	9.80	23.04	662.81B
6 Months 349.2 - 517.8	21.22	42.28	18.35	32.84	1.30T
Year 349.2 - 553.7	-4.06	58.53	32.46	57.19	2.38T
3 years 309.5 - 555.5	46.72	58.32	45.28	95.84	4.56T
5 years 213.4 - 555.5	63.36	30.88	63.01	119.77	6.98T
All time 14.9 - 468.4	2,462.66	104.60	—	—	5.44T

Microsoft Corporation

Price and volatility history

Risk ratios