Oversold Microsoft Draws Parallels to Google's Past
Microsoft's (MSFT) stock has been underperforming this year, down 23% year-to-date. However, Wedbush's Global Head of Tech Research, Dan Ives, believes it is the most oversold large-cap stock.
Ives drew parallels between the current narrative around Microsoft and the negative conversations surrounding Alphabet Inc.'s (GOOG, GOOGL) Google a year ago. At that time, Alphabet's Class A shares fell 18% in Q1 last year amid concerns about AI impacting its search business.
Since then, GOOGL stock has rallied 138%. Ives pointed out that demand for AI infrastructure currently outstrips supply by a ratio of 15 to 1. He also stated that even if margin pressures begin to show up, he doesn't see them reflected in companies' earnings over the next nine to twelve months.