Microsoft (MSFT) stock is down nearly 20% in 2026, trading around $384 at the time of writing. And according to one analyst, the pain may not be over yet.
Kevin Dempter, analyst at Renaissance Macro Research, sent a note to clients this week with a clear message: don’t buy the dip. Instead, wait for the next bounce — and use it as an exit.
Dempter argues that the recent recovery in software stocks is already running out of steam. In his view, a “massive topping pattern” is taking shape across the sector, which typically signals that an uptrend is losing momentum before a reversal.
MSFT is one of two names Dempter specifically flagged, alongside Palantir (PLTR). He says both have “recently been battered at resistance,” meaning the stocks hit a price ceiling and pulled back. His advice to current holders: wait for the next temporary pop, then get out.
It’s a contrarian take. Microsoft has long been treated by institutional and long-term investors as a reliable compounder — the kind of stock you hold through cycles. Dempter isn’t disputing the long-term thesis, but he’s saying the near-term setup looks ugly.
The sell call isn’t just about chart patterns. There’s a fundamental concern underneath it too.
Microsoft has committed to spending up to $190 billion on AI infrastructure in 2026. That number has made some investors nervous. The question being asked across the hyperscaler space — at Microsoft, Meta (META), and Alphabet (GOOGL) — is the same: when does all this capital expenditure start showing up in durable revenue?
Dempter notes that Microsoft’s stock pressure comes more from spending anxiety than from fears of AI disruption itself. That’s a subtle but important distinction. The market isn’t worried AI won’t work — it’s worried the bill is too big.
Dempter’s concerns don’t stop at Microsoft. He sees “big tops forming” in Netflix (NFLX), Disney, AT&T, and Meta as well. Across the tech, media, and telecommunications space, he’s telling investors to rotate out of names he considers “increasingly vulnerable.”
The call runs counter to the prevailing Wall Street view. MSFT currently holds a consensus Strong Buy rating from 37 analysts — 35 Buys and 2 Holds. The average price target sits at $557.64, implying roughly 45% upside from current levels.
That’s a wide gap between Dempter’s cautious stance and the broader analyst community. But Dempter’s argument isn’t about the company’s long-term prospects — it’s about near-term price action and what the chart is telling him right now.
Microsoft has not responded publicly to the note. MSFT stock closed down 2.06% on Tuesday.
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