With strong hedge fund and Wall Street support, Microsoft Corporation (NASDAQ:MSFT) ranks among the best AI infrastructure stocks and carries an upside potential of 24.4%.
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Previously, Microsoft Corporation (NASDAQ:MSFT) built its early AI lead through its partnership with OpenAI. However, now, it is racing to prove it can operate independently.
On May 28, 2026, Reuters reported that Microsoft Corporation (NASDAQ:MSFT) plans to unveil a suite of homegrown AI models at its annual Build developer conference in San Francisco, including a coding model aimed at boosting usage of its GitHub Copilot tool. Microsoft is also planning to roll out new models specializing in transcription, reasoning, speech, and images, according to the report. Microsoft shares climbed nearly 3% on the news.
The announcement reflects a broader strategic pivot.
Microsoft Corporation (NASDAQ:MSFT) has historically relied on models from OpenAI, Anthropic, and Google to power GitHub Copilot, but products such as Anthropic’s Claude Code have quickly risen to the top of AI-assisted coding, pressuring the tool’s competitive position. The two companies have also restructured their partnership terms in recent months to reduce reliance on each other, pushing Microsoft to accelerate its own model development.
To close the gap, Microsoft Corporation (NASDAQ:MSFT) is also eyeing AI startup acquisitions, Reuters reported earlier in May, with potential deals aimed at building AI talent and delivering on a stated goal of developing a cutting-edge model by next year.
Analyst sentiment on Microsoft Corporation (NASDAQ:MSFT) remains strong despite the strategic uncertainty. As of June 1, 2026, 57 of 61 covering analysts rate the stock bullish, with a median price target of $557.90.
Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide. Its flagship products include Windows, Microsoft 365, Azure, LinkedIn, and Xbox.
While we acknowledge the potential of MSFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years. Disclosure: None. Follow Insider Monkey on Google News.
