<div id="readability-page-1"><p>Tech giant Microsoft (MSFT) has been on a bit of an expansion tear of late, trying to put together the kind of infrastructure required to make it a powerhouse in cloud and in artificial intelligence (AI) as well. But some are wondering if, perhaps, Microsoft is going a bit too far, building more than it really needs. The idea is a compelling one, if a bit speculative. Investors would have none of it, though, as shares ticked upward fractionally in Wednesday afternoon's trading.</p><h3>Claim 70% Off TipRanks This Holiday Season</h3><ul><li>Unlock  hedge fund-level data  and  powerful investing tools  for smarter, sharper decisions  </li><li> Stay ahead of the market with  the latest news and analysis  and maximize your portfolio's potential</li></ul> <p>Microsoft, reports note, currently has one of the largest capital budgets in AI. That alone is a bit of a red flag, though not a particularly large one. Someone has to be the biggest, after all, and Microsoft's sheer scale allows it to comfortably spend on nearly any task. But a lot of that spending depends heavily on OpenAI (OPAIQ), which agreed to buy $250 billion worth of Azure services.</p> <p>That is a huge buy, and anywhere else, would justify a healthy budget to ensure that the demand could be met. But OpenAI has a similar, slightly larger deal with Oracle (ORCL) at $300 billion. So how is OpenAI going to meet bills that add up to better than half a trillion dollars? This is leading some to believe that, perhaps, Microsoft is building infrastructure to meet a demand that will, ultimately, become phantom demand.</p> <h2><strong>Cloud Expansion</strong></h2> <p>But then, Microsoft may be able to find alternate uses for some of that infrastructure. It recently announced that it is bringing Xbox Cloud Gaming to Amazon (AMZN) Fire TV systems. Some of them, anyway; &#34;select&#34; Amazon Fire TVs will get access to the platform, allowing anyone with a compatible television and Xbox controller to get in on the games.</p> <p>The Fire TV 4 and the Fire TV Omni QLED are the two in particular that will run the Xbox platform, reports note. It also goes to show that Microsoft may not need consoles for console gaming after all, a point which some have wondered would be underscored with Microsoft's future gaming plans.</p> <h2><strong>Is Microsoft a Buy, Hold or Sell?</strong></h2> <p>Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 32 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 11.13% rally in its share price over the past year, the average MSFT price target of $631.36 per share implies 29.45% upside potential.</p></div>

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<p>Microsoft is expanding its infrastructure for cloud and AI, raising concerns about overbuilding. Despite this, Microsoft's stock rose slightly. The company has a large capital budget in AI, heavily reliant on OpenAI's Azure services purchase. Analysts maintain a Strong Buy rating on MSFT stock, with a 29.45% upside potential, following an 11.13% rally over the past year.</p>

- Microsoft is expanding its infrastructure to strengthen its positions in cloud services and artificial intelligence, but concerns arise over the necessity of such investments.  
- Significant spending comes from a large deal with OpenAI, raising questions about meeting the demand versus potential overbuilding.  
- Despite doubts, analysts maintain a Strong Buy recommendation for Microsoft stock, projecting a substantial upside potential in the coming months.

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Is Microsoft Overbuilding? Microsoft Stock (NASDAQ:MSFT) Ticks Up With Mounting Concern