Shares of Microsoft moved higher in early trading, even as the stock remains significantly below its peak.
The move comes as investor concerns around artificial intelligence competition appear to ease following positive industry feedback.
The stock rose 4% to $408.27, though it remains down 27% from its all-time closing high of $542.07 recorded in October last year.
The decline had been driven in part by concerns that Microsoft’s core software offerings could face disruption from rapidly evolving AI technologies.
Survey points to strong AI and cloud adoption
A survey conducted by KeyBanc suggests those concerns may be overstated.
The poll of value-added resellers—firms that customise third-party software before selling it—indicated strong demand for Microsoft’s artificial intelligence, cloud, and cybersecurity products.
According to analyst Eric Heath, adoption of Microsoft’s AI Copilot has been accelerating.
“Nearly half of respondents have rolled Copilot out into production, up 14 points vs 4Q, and [Microsoft] garnered most responses in highest adoption in securing AI workload,” Heath wrote.
The survey also showed that 85% of respondents expect to increase spending on Microsoft’s Azure cloud platform, marking the highest level in five quarters.
This could help address investor concerns about Azure’s growth trajectory relative to competitors such as Google Cloud.
KeyBanc maintained an Overweight rating on Microsoft with a $600 price target.
Expanding AI infrastructure footprint
Alongside improving sentiment around its software and cloud offerings, Microsoft is continuing to scale its artificial intelligence infrastructure.
The company has agreed to lease additional data centre capacity in Narvik, Norway, at a site originally intended for OpenAI.
The facility, located inside the Arctic Circle, is operated by neocloud provider Nscale.
As part of the agreement, Microsoft will rent 30,000 additional AI chips based on Nvidia’s Vera Rubin architecture, building on a prior $6.2 billion commitment at the same location.
The site had previously been marketed by OpenAI as part of its “Stargate Norway” initiative, linked to a broader $500 billion infrastructure push in the United States.
However, OpenAI is said to have not finalised an agreement for capacity at the facility.
The shift comes shortly after OpenAI paused a similar Stargate project in the United Kingdom, citing high energy costs and regulatory challenges.
The Norway deal reflects Microsoft’s broader strategy of securing large-scale computing capacity through partnerships with specialised cloud providers, as demand for AI infrastructure accelerates.
Microsoft has been actively pursuing similar arrangements.
Last month, the company took over a data centre project in Texas that had originally been developed for OpenAI and Oracle.
Outlook supported by demand signals
The combination of strong enterprise demand for AI tools, sustained cloud spending, and aggressive infrastructure expansion appears to be reinforcing Microsoft’s position in the evolving AI landscape.
While the stock remains below its previous highs, recent data points suggest that concerns about competitive threats to Microsoft’s core business may be moderating, even as the company continues to invest heavily to support future growth.
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