Binance Pulse | BNB Price Trends
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The market, bless its perpetually optimistic heart, had a good Monday. Microsoft Corp (NASDAQ:MSFT) shares ticked up 0.40% on November 24, 2025, closing in that $474 range. The reason? Federal Reserve Governor Christopher Waller's call for a December interest-rate cut. His rationale, a "risk management" move to ease pressure on consumers and a softening labor market, sent a collective sigh of relief through the tech sector. Suddenly, the specter of "easier monetary policy" made large-cap tech look like the only lifeboat in a choppy sea, pulling in investors who’d been on the sidelines. We saw a rotation back into names like Microsoft, Amazon, and even the broader Nasdaq 100, which had been down about 6% from its late October high. It’s almost as if the simple mention of a rate cut can make everyone forget the underlying currents.
But if you’re looking beyond the immediate market euphoria—and frankly, if you’re reading this, I assume you are—Waller’s comments, while providing a temporary updraft for microsoft stock price today, don’t magically fix the structural issues simmering beneath the surface. This isn't just about the price of microsoft stock moving; it’s about why it moves and what those movements obscure. While the market celebrated a potential quarter-point cut, a far more granular, and I’d argue, more critical, piece of analysis hit the wires just days prior.
Rothschild & Co Redburn, a firm that had maintained a bullish view on Amazon and Microsoft for years, downgraded both stocks this week. Analyst Alex Haissl didn’t mince words, pointing directly to what he sees as fundamental flaws in the AI business model. This significant move was detailed in The lonely AI bear: Why one analyst just took the brave step of downgrading Amazon and Microsoft - Business Insider. His argument is stark: the market is wildly overestimating the returns from AI investment. I’ve looked at these numbers, and frankly, they’re sobering. Haissl estimates that GPU capex (capital expenditure for graphics processing units, the backbone of AI) runs around $40 billion per gigawatt, while the revenue generated from that same gigawatt is closer to $10 billion. That’s a significant delta, a four-to-one cost-to-revenue ratio that should make any investor pause.
And it gets worse. AI chips, the very engines driving this supposed revolution, have a shockingly short lifespan. Haissl suggests three years, which, if accurate, makes them "value destructive" assets. Think about that for a moment. You’re pouring billions into infrastructure that depreciates faster than a new car driving off the lot, and the revenue it generates doesn't even cover a quarter of the upfront cost. Microsoft, for its part, is spending a staggering $80 billion on new data center infrastructure this year alone. This isn't pocket change; it's a bet of epic proportions. My analysis suggests that if Haissl's numbers are even directionally correct, then the massive build-out in Azure (Microsoft’s cloud computing division, which facilitates AI models) isn’t just expensive; it’s a potential drain. Hyperscalers like Microsoft, despite their immense scale, also have limited pricing power for the AI hardware itself, which is largely sourced from tech startups or specialized chipmakers like Nvidia stock price beneficiaries. This is the part of the report that I find genuinely puzzling; how does a company maintain margins when its core infrastructure components are both costly and externally controlled?
The market’s current valuation of Microsoft, trading at nearly 13 times sales, is a figure we last saw during the dot-com bubble more than two decades ago. This isn’t a small detail; it’s a flashing red light. The optimism surrounding AI, with projections of 30% annual growth through 2033, feels less like a solid investment thesis and more like a collective act of faith when viewed through the lens of these capital expenditures. It’s like building a gold mine with machinery that costs four times the value of the gold you extract, and then having that machinery rust out every three years. The "Cloud 1.0 economics" that drove Big Tech growth in the 2010s—lean, efficient, high-margin—seem to be a distant memory in the era of AI.
Adding another layer of complexity, the Gates Foundation Trust continues to offload its microsoft share price position. They've been net sellers every quarter since late 2023. This consistent divestment from Microsoft—a company Bill Gates himself built and where he remains a major shareholder—is a signal worth dissecting, as explored in Bill Gates Is Rapidly Selling Microsoft Stock. Here's What Investors Need to Know. - The Motley Fool. While advisors often caution against panic, citing the trust's external portfolio managers and a history of selling (they did make a massive purchase in 2022, but prior to that, selling was the tradition), the implications of such a move are hard to ignore. This isn't just noise; it’s a data point.
The broader market isn’t exactly cheap either. The S&P 500 trading above 30 times earnings is roughly double its long-term average. Coupled with the shaky confidence in the AI trade (the tech-heavy Nasdaq 100 and the Roundhill Magnificent Seven ETF are both down from their peaks last month), you have a situation where a macro tailwind from a rate cut announcement can temporarily lift all boats, but the specific structural issues for individual companies, especially those betting big on AI like Microsoft, remain. Is the market simply choosing to look past these fundamental discrepancies, or are we witnessing a collective belief that "this time it's different?" We’ve heard that before, haven’t we? And how many times does history need to repeat before we adjust our models?
The current market sentiment, bolstered by Waller’s dovish leanings, has given Microsoft a reprieve. But beneath the surface, the numbers from analysts like Haissl paint a far less rosy picture of AI's economic reality. Microsoft’s aggressive spending on data centers, the high cost-to-revenue ratio of GPU infrastructure, and the short lifespan of AI chips present a significant challenge to the long-term profitability of its AI ventures. When you factor in the consistent selling by the Gates Foundation Trust and Microsoft's valuation multiples reaching dot-com bubble levels, it's clear that while the market wants to believe in the AI dream, the hard data suggests a more cautious approach is warranted. The question isn’t if AI will grow; it’s at what cost and who truly profits when the underlying economics are so challenging. The market is betting on a future where these costs somehow become irrelevant, but I’ve yet to see the data to support that leap of faith.