Shares in Microsoft (MSFT) stock slipped during Tuesday’s trading session by 1.2%, possibly following rumors of a canceled Xbox development. Early Tuesday, there were talks of Xbox canceling a first-party handheld console after the failure to reach a deal with Advanced Micro Devices (AMD).
According to tech leaker KeplerL2, the two parties could not confirm a deal that would permit the start of creating the handheld console, which would’ve been a first for Xbox. Per the rumor, AMD wanted a commitment of 10 million units before it would develop a System-on-a-Chip (SoC) for the handheld Xbox. Microsoft was reportedly unwilling to agree to such a large number, as the demand for a handheld Xbox wasn’t likely to reach those levels. As a result, the rumored project may have fallen through already.
In more solidified news around MSFT, Microsoft announced last week it is spending at least $10 billion with CoreWeave and up to $19.4 billion with Nebius to secure computing capacity for its artificial intelligence operations. These AI cloud deals are addressing Microsoft’s urgent need for GPU resources as demand for AI services continues to surge way beyond what’s currently available.
Also Read: Microsoft (MSFT) Bets $33B on CoreWeave & Nebius to Ease AI Crunch
The agreements validate the business model of specialized providers even more. Both CoreWeave stock and Nebius stock face execution risks around scaling infrastructure and managing capital expenditures, but Microsoft’s multi-billion-dollar commitments are providing revenue visibility that appeals to investors who are monitoring these opportunities right now.
Microsoft’s shares have shown resilience due to its focus on AI and cloud services, driving substantial revenue growth. Analysts maintain a generally bullish outlook with price targets ranging from $520 to $650, suggesting potential upside from the current market price of $528.57.