Amidst a backdrop of Middle East volatility and energy market swings, Emerald Advisors portfolio manager Don Nesbitt is urging investors to look past short-term “AI horror stories” and see the current dip in Microsoft Corp. (NASDAQ:MSFT) as a premier entry point.
The AI ‘Buying Opportunity’
While the broader market has been distracted by oil price fluctuations and geopolitical “exogenous shocks,” Nesbitt argues that the recent pressure on software stocks is a sentiment-driven mispricing.
Addressing the recent pullback in big-tech names, Nesbitt was clear on his stance regarding the software giant MSFT: “I think it’s an opportunity here to buy.”
He notes that the stock has been “trounced” recently due to heightened anxiety over AI’s potential to disrupt traditional business models. However, Nesbitt views this fear as misplaced for companies with established ecosystems.
“Microsoft is going to benefit from this,” he stated, dismissing the narrative that the company is at risk.
Data And Scale As A Moat
According to Nesbitt, the distinction between AI “victims” and “beneficiaries” lies in scale and resources.
While he acknowledges that AI represents an “existential threat” to smaller, niche applications, he believes Microsoft’s infrastructure provides a massive defensive moat.
“They have a large customer base. They have a lot of data,” Nesbitt explained. “AI can help improve their services, provide better services, and I think they’re going to be a long-term winner from it.”
Refocusing On Earnings
As the market reels with the shock of Middle East tensions, Nesbitt expects the “AI trade” to return to the forefront of investor consciousness. He suggests that the primary driver for equities is shifting away from Federal Reserve policy and toward fundamental growth.
“I don’t think that the primary driver of the equity markets is interest rate cuts anymore,” Nesbitt said, noting that with multiples already high, the focus must remain on the economy and bottom-line performance. For Nesbitt, Microsoft remains a top-tier candidate to lead that earnings-driven recovery.
MSFT Tumbles In 2026
Despite being down 18.21% year-to-date, the stock rose 4.43% over the past year. While MSFT was also lower by 22.43% over the last six months, it closed 1.58% lower on Friday at $395.55 apiece. In the last week alone, the stock fell by 3.28%.
Benzinga’s Edge Stock Rankings indicate that MSFT maintains a weaker price trend over the short, medium, and long terms, with a solid quality score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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