This Dividend-Yielding Tech Stock Looks a ‘Compelling Buy’ for 2026 After 2 Years of Underperformance

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};ge("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat($n)),notifLabel:document.querySelector(".".concat(Xn))};t.notifDropdown&&so(e,t)}))}()}};]]>Mohit OberoiThu, December 25, 2025 at 1:30 AM GMT+1 4 min readWith year-to-date (YTD) gains of just about 15%, Microsoft (MSFT) is underperforming both the broad-based S&P 500 Index ($SPX) and the tech-heavy Nasdaq Composite Index ($NASX). The Satya Nadella-led company underperformed last year as well, and its gains of 12% in 2024 paled in comparison to its tech peers as well as the broader markets.www.barchart.comIncidentally, the “Magnificent 7,” which led the market rally from the front in 2023 and 2024, did not have the best of years, and none of them made it to the list of top 20 gainers in the S&P 500 Index in 2025. The group’s collective price action has been below par, and only Alphabet (GOOG) (GOOGL) and Nvidia (NVDA) are outperforming their average S&P 500 Index peer by a noticeable margin. Meanwhile, after the 2025 underperformance, Dan Ives of Wedbush Securities—a known perma tech bull—sees MSFT stock rising to $625 next year and termed it a “compelling buy.” Notably, while tech stocks aren’t really known for their dividends and many don’t pay one in the first place, Microsoft’s dividend yield of 0.75% is the highest among Magnificent 7 stocks. It is on the verge of becoming a Dividend Aristocrat.This Dividend Giant Yielding 4.5% Is Wall Street’s Top Telecom Pick for 2026Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines.Microsoft’s 2025 underperformance has largely been due to concerns over its burgeoning artificial intelligence (AI) capex. The company, which previously said that its capex growth would fall in the fiscal year 2026, now sees it going up instead. The Windows parent splurged almost $35 billion towards capex in the first quarter of its fiscal year 2026, which ended in September, a record for the company.To be sure, rising AI capex is not a Microsoft thing, and Amazon (AMZN), Meta Platforms (META), and Alphabet have also bumped up spending amid the AI arms race. Barring Alphabet, which entered 2025 with tepid expectations and ended up impressing with its financial performance, the other three are underperforming this year. I find an Alphabet connection to Microsoft’s underperformance. While Gemini gaining ground at OpenAI’s cost helped propel GOOG stock higher, it put pressure on Microsoft, which is OpenAI’s biggest investor and a proxy play on the world’s most valuable unlisted startup.Despite the 2025 underperformance, the analyst community is not giving up on Microsoft, and it has a consensus rating of “Strong Buy” from the 48 analysts polled by Barchart. MSFT stock trades even below the Street-low target price of $490, while the mean target price of $629.23 is almost 30% higher than current price levels.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,977.25 -5.25 (-0.08%)Dow Futures48,928.00 -101.00 (-0.21%)Nasdaq Futures25,872.50 -8.00 (-0.03%)Russell 2000 Futures2,559.50 -6.60 (-0.26%)VIX14.21 +0.74 (+5.50%)Gold4,534.10 +31.30 (+0.70%)Trending tickersBTC-USD Bitcoin USD 88,512.64 +1,054.15 (+1.21%)NVDA NVIDIA Corporation 188.61 -0.60 (-0.32%)SIDU Sidus Space, Inc. 2.2000 +0.5500 (+33.33%)NQ=F Nasdaq 100 Mar 26 25,872.50 -8.00 (-0.03%)MU Micron Technology, Inc. 286.68 +10.41 (+3.77%)PortfolioSign in to access your portfolioSign inTop gainersEWTX Edgewise Therapeutics, Inc. 27.29 +5.55 (+25.50%)PSNYW Polestar Automotive Holding UK PLC 7.40 +1.00 (+15.63%)TVTX Travere Therapeutics, Inc. 40.28 +4.92 (+13.91%)PSNY Polestar Automotive Holding UK PLC 17.18 +2.05 (+13.55%)PATH UiPath Inc. 17.16 +1.20 (+7.52%)Top losersASTS AST SpaceMobile, Inc. 78.05 -7.62 (-8.89%)HYMC Hycroft Mining Holding Corporation 24.96 -2.18 (-8.03%)QBTS D-Wave Quantum Inc. 27.52 -1.60 (-5.49%)BETA BETA Technologies, Inc. 30.12 -1.50 (-4.74%)PPTA Perpetua Resources Corp. 26.58 -1.12 (-4.04%)Most activeNVDA NVIDIA Corporation 188.61 -0.60 (-0.32%)PLUG Plug Power Inc. 2.1000 +0.0500 (+2.44%)TSLA Tesla, Inc. 485.40 -0.16 (-0.03%)INTC Intel Corporation 36.16 -0.19 (-0.52%)NKE NIKE, Inc. 60.00 +2.66 (+4.64%)Top economic eventsEarnings eventsMy earnings eventsEarnings events