Goldman Sachs Resets Microsoft Stock Forecast

Analysts see progress in Microsoft's custom AI chip and data storage breakthroughs, but caution remains.

Published on Feb. 25, 2026

Got story updates? Submit your updates here. ›

Microsoft (MSFT) stock has dropped around 20% so far in 2026, largely due to high capital expenditures and its reliance on OpenAI. However, Goldman Sachs analysts see positive signs in Microsoft's new Maia 200 custom AI inference chip and its Project Silica breakthrough for long-term, low-cost data storage in glass. While the analysts maintain a buy rating on MSFT, they also note potential downside risks like lower-than-expected revenue from the OpenAI partnership and longer ramps for internal silicon projects.

Why it matters

Microsoft is making significant investments in AI and data storage technologies that could impact its future profitability and competitiveness. The performance and cost-effectiveness of its custom silicon, as well as the success of its OpenAI partnership, will be crucial factors in determining Microsoft's path forward.

The details

Goldman Sachs analysts say Microsoft's new Maia 200 chip improves the company's AI compute price-to-performance ratio and is a step towards achieving AI compute gross margins comparable to its CPU-based Azure workloads. However, the analysts note limitations including the need to see real-world performance data and deepen the software ecosystem. They believe Nvidia will maintain leadership in accelerators in the near-term, but see a growing presence of custom ASICs for internal workloads longer-term. Additionally, Microsoft has made a breakthrough with Project Silica, enabling low-cost, long-term data storage in borosilicate glass that can preserve data for 10,000 years.

  • Microsoft announced the Maia 200 chip on January 26, 2026.
  • Microsoft reported Q2 fiscal year 2026 earnings on January 28, 2026, which caused the stock to drop around 10% the following day.

The players

Microsoft

A multinational technology company that develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.

Goldman Sachs

A leading global investment banking, securities, and investment management firm.

Nvidia

A multinational technology company that designs graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market.

Broadcom

A global semiconductor company that develops and supplies a range of semiconductor and infrastructure software products.

Amy Hood

The Chief Financial Officer of Microsoft.

Got photos? Submit your photos here. ›

What they’re saying

“Maia is 30% cheaper than any other AI silicon on the market today.”

— Scott Guthrie, EVP of the Microsoft Cloud + AI group (Microsoft)

“We believe diversifying Microsoft's silicon footprint will be key to achieving better gross margins and returns on investment in AI compute. Microsoft believes gross margins in AI compute will approach those of CPU-based compute over time.”

— Gabriela Borges, Analyst (Goldman Sachs)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

Microsoft's investments in custom silicon and long-term data storage solutions demonstrate the company's commitment to improving its AI compute capabilities and cost structure, which could be crucial in maintaining its competitiveness in the cloud computing and enterprise software markets.