Microsoft Trades at 25.6x P/E as Citigroup Forecasts $8.9T AI Spend
Microsoft trades at 25.6x P/E after an underwhelming quarter, making it among the biggest bargains in AI-focused mega caps. Citigroup raised its 2026-30 global AI capex forecast to $8.9 trillion and projects hyperscalers including Microsoft will spend $630 billion this year, while shares slipped about 0.8% at the open.
1. Valuation Pressure After Underwhelming Quarter
Microsoft delivered one of the weakest quarterly performances among leading tech giants, resulting in a trailing P/E of 25.6x that positions the stock as one of the most attractively valued in the AI investment cohort.
2. Citigroup Raises AI Capex Forecasts
Citigroup boosted its global AI capital expenditure outlook for 2026–30 to $8.9 trillion and expects hyperscalers including Microsoft to account for over $630 billion in enterprise AI capex this year, highlighting the scale of AI deployment.
3. Market Reaction and Share Movement
Shares of Microsoft declined roughly 0.8% at Tuesday’s market open, reflecting broader tech sector volatility and investor caution over the timing and returns of major AI investments.