Dan Ives Calls Microsoft Selloff Short-Term 'Air Pocket' in AI Cycle

On June 26, Wedbush's Dan Ives framed Microsoft's sharp selloff as an 'air pocket stage' and 'Twilight Zone,' with investors punishing hyperscalers for heavy AI capex that has yet to deliver near-term revenue. The comments follow Stifel's June 25 downgrade that cut the price target to $400 and triggered a fresh 52-week low, sending shares down more than 25% year-to-date to close around $352. Analysts now see fiscal 2027 gross margins compressing to 63% versus the Street's 66.5% estimate, with EPS potentially overstated by $1, ahead of July 29 earnings. Despite the near-term pressure, Ives called 2026 the early phase of a decade-long AI buildout.