Microsoft Rises Over 3% Approaching $400: Partners With 3M to Deploy EBO Fiber Optics, Defies Software Stock Pullback Dragged Down by IBM

Tradingkey - On July 15 Eastern Time, Microsoft ( MSFT )'s share price rebounded strongly in early trading. As of press time, it was up 3.2% to $397.26, approaching the $400 mark.

It is reported that Microsoft and 3M ( MMM) announced a strategic partnership that will focus on AI data center infrastructure and enterprise transformation. According to the statement, Microsoft's Azure cloud platform and AI infrastructure will become the first hyperscale cloud provider to deploy 3M's Expanded Beam Optical (EBO) technology. 3M will also leverage Microsoft's AI and digital platforms to drive enterprise transformation across its key business functions.

[Source: TradingView]

Notably, after IBM announced disappointing earnings yesterday, dragging down the overall performance of US software stocks, Microsoft's share price fell 1.55% yesterday. Goldman Sachs promptly issued a clear warning, pointing out that this IBM event "will fully validate the software bear market scenario" and expecting widespread sell-off pressure across the software and services sector.

The market generally believes that Microsoft's late-July earnings report will be a watershed for this wave of software valuation rebuilding. If Azure's cloud growth rate for the next quarter remains above 20%, it means the market views IBM as an isolated case of its mainframe business, which does not affect the cloud software thesis. If Azure's growth rate drops below 18%, it indicates market concern that the trend of enterprise IT budgets shifting toward hardware has spread to cloud subscriptions.

Citi stated that due to valuation multiple compression in the software industry, it lowered Microsoft's price target from $620 to $570, while maintaining its "Buy" rating. Citi expects Microsoft's fourth fiscal quarter results to be strong; entering fiscal year 2027, Microsoft will be able to leverage stronger returns driven by accelerated growth in its core businesses (Azure and M365 Copilot), which will ultimately drive continued acceleration in overall revenue and EPS growth.

In addition, Microsoft announced an upgrade to its Dataverse platform capabilities, officially connecting Dataverse plugins to three major AI development environments: GitHub Copilot, Claude, and Cursor. This leverages natural language instructions to improve development efficiency while increasing investment in the MCP (Model Context Protocol) ecosystem. As Microsoft's enterprise-grade cloud data management system, Dataverse is upgrading from a data foundation for low-code/no-code applications to a core infrastructure for AI agents in the generative AI era.

Developers can invoke underlying capabilities such as MCP, SDK, and CLI through natural language within the aforementioned AI tools, and all operations are controlled by Dataverse's permission system and governance rules, balancing development efficiency with data security.

At the ecosystem level, Microsoft's MCP protocol has covered over 60 out-of-the-box servers, which can integrate various tools across productivity, development, and business applications, adapting to its full suite of proprietary products including Microsoft 365 Copilot and Azure AI Foundry. Meanwhile, it opens certification channels for third-party MCP servers and provides enterprises with "Bring Your Own MCP" self-developed deployment solutions, complete with administrator review and security monitoring capabilities, driving the upgrade of Dataverse into an AI-driven, well-governed, next-generation enterprise data platform.