Microsoft Corporation (MSFT) Explores Xbox Shake-Up While Advancing In-House AI Strategy

Microsoft Corporation (NASDAQ:MSFT) is among the Top Stocks to Buy and Hold for the Long Term. On June 12, Reuters, while citing The Information, reported that Microsoft Corporation (NASDAQ:MSFT) is exploring options for significant structural changes in its Xbox division. The report noted that options under consideration include spinning Xbox off as a separate entity or restructuring it as a wholly owned subsidiary.

​The report also highlighted that Microsoft is also weighing the possibility of forming a joint venture with outside partners, noting that such moves could ultimately make the gaming business easier to sell if Microsoft chose to go that route. Moreover, CEO Satya Nadella and CFO Amy Hood have also reportedly approved plans to increase spending on top-tier game development for the fiscal year beginning in July. Reuters noted that the final budget has not yet been confirmed.

​The report comes just days after Bloomberg News revealed that Xbox is planning major layoffs next month, alongside significant cuts to marketing and other budgets.

Separately, on June 4, TD Cowen reiterated a Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a price target of $540. The firm noted that Microsoft is moving toward building more of its own AI capabilities rather than relying heavily on external frontier labs like OpenAI. The firm also noted progress across Microsoft’s broader AI stack, including advances in DIY applications and custom silicon. TD Cowen highlighted that such developments explain why Microsoft had been quietly allocating GPU capacity toward internal research and development in recent quarters.

Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide. Its flagship products include Windows, Microsoft 365, Azure, LinkedIn, and Xbox.

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