MSFT Stock: Redburn Raises Target To $440 As AI Safety, Spending Debate Continues

• Microsoft AI chief Mustafa Suleyman said China’s AI progress should not be used as a reason to avoid guardrails, calling for human control and shared safety standards.
• Michael Burry raised concerns over the scale of hyperscalers’ AI infrastructure commitments, arguing that rapidly changing hardware could create challenges for long-lived data-center investments.
• The DOJ’s support for Microsoft and OpenAI in The New York Times copyright case reportedly caught the USPTO and Copyright Office off guard, adding another layer to Microsoft’s AI-related legal landscape.

Microsoft Corp (MSFT) was in the limelight on Monday after Rothschild & Co Redburn raised its price target on the software giant to $440 from $400 while keeping a ‘Neutral’ rating on the shares, citing higher valuation multiples following a broader software-as-a-service re-rating. The firm updated its model after Microsoft’s latest earnings report, according to The Fly.

MSFT stock was trading 0.4% higher in early premarket trade, at the time of writing.

Redburn’s revised target reflects the firm’s updated valuation following the broader re-rating across SaaS stocks. It comes as Microsoft navigates a wider industry debate about the pace and risks of AI buildout. The company’s AI chief has publicly spoken about safety guardrails, while the ‘Big Short’ investor Michael Burry questioned the durability of hyperscalers’ infrastructure investments.

Microsoft AI Chief Defends AI Guardrails Amid China Debate 

Microsoft AI chief Mustafa Suleyman said concerns over China's progress in artificial intelligence should not be used as a reason to avoid putting guardrails around the technology, according to a Bloomberg report published Sunday.

Separately, speaking on CNN’s Fareed Zakaria GPS, Suleyman said, “I don’t think we should use China as the bogeyman for not making progress on our own efforts” on AI safety. He said AI systems should have clear guardrails and remain under human control.

Suleyman also said regulation should focus on creating shared norms and safety standards and should not necessarily slow AI development. His comments followed the release of a Microsoft AI team manifesto outlining principles for the company’s development of advanced AI systems.

Burry Questions Durability Of Hyperscalers’ AI Infrastructure

The AI infrastructure debate also extends to the economics behind the AI buildouts. In a Substack post over the weekend, investor Michael Burry raised concerns about the gap between the long life of data-center infrastructure and the much faster pace of AI hardware development.

Burry argues that data centers can take years to build and involve long-term commitments, while AI accelerators and related technology can change much faster. He warned that this could leave hyperscalers with specialized infrastructure that is harder to repurpose if newer hardware requires different power, cooling or other configurations. 

DOJ Filing Adds Another Layer To Microsoft's AI Legal Exposure

Separately, the Department of Justice’s statement of interest supporting Microsoft and OpenAI in The New York Times’ copyright lawsuit reportedly surprised the U.S. Patent and Trademark Office and the Copyright Office, according to Axios.

The NYT alleges that OpenAI and Microsoft used copyrighted works to train AI models and that AI-generated outputs can unlawfully substitute for its content. The DOJ’s filing gives the government an opportunity to present its position in the private litigation, although the statement is not binding on the court.

Statements of interest allow the government to present its position in private litigation. While they are not binding on the court, they can influence legal proceedings, the report added.

Retail View on MSFT

Retail sentiment around MSFT on Stocktwits was “bearish” over the past 24 hours, with "normal" message volume.

MSFT shares have gained about 2% year-to-date.

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