PREVIEW: Microsoft dips as investors focus on AI spending

Microsoft Corp MSFT.O shares dipping 0.4% on Wed ahead of qtrly results after the bell, as investors focus on cloud growth and AI-related capital spending

Many on Wall Street have worried in recent months about a potential bubble in AI-related stocks following outsized gains in recent years, and Wed's reports from MSFT and Meta Platforms META.O will give investors a fresh glimpse of how quickly massive investments in AI are paying off

The software and cloud computing giant is expected to report a 15% rise in qtrly rev to $80.27 bln and adjusted EPS of $3.97, up from $3.23 yr-ago, per LSEG

The co on Mon unveiled its second-gen 'Maia 200' in-house AI chip, signaling a push to reduce reliance on Nvidia NVDA.O and control costs for its expanding AI services

Stock has fallen ~1% YTD, underperforming the Nasdaq's .IXIC 3% gain, and is ~11% below its Oct. 28 record high close

MSFT recently traded at 27x fwd earnings, below its five-year avg of 29x, per LSEG data

Wall Street sentiment is bullish, with fifty-seven of sixty analysts rating the stock 'buy' or 'strong buy' and a median PT of $630 vs its current price of $478.80