Altman Defends AI Resource Demands Amid Criticism
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 23 2026
0mins
Should l Buy MSFT?
Source: Newsfilter
- Water Usage Defense: OpenAI CEO Altman stated at the India AI Impact summit that claims ChatGPT uses gallons of water per query are “completely untrue,” emphasizing that human energy consumption is also significant, indicating that AI's resource demands are not unique.
- Energy Consumption Warning: While acknowledging the rising overall energy consumption of AI, Altman urged a swift transition to nuclear and renewable energy to address future computing demands, reflecting a commitment to sustainable development.
- Human vs. AI Efficiency Comparison: Altman pointed out that the energy required to train AI models is comparable to that needed for human development, stressing that once trained, AI's efficiency in answering questions may have already caught up with humans, showcasing advancements in AI technology.
- Data Center Development Controversy: As governments and companies invest billions in new data centers, Altman and other tech leaders advocate for diverse energy sources to meet AI systems' computing needs while addressing local community concerns about grid pressure.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 398.550
Low
500.00
Averages
631.36
High
678.00
Current: 398.550
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Increased Quantum Investment: Microsoft is heavily investing in its quantum computing ecosystem, introducing the Majorana 1 quantum processor aimed at enhancing computational stability and reducing errors, laying the groundwork for future commercialization.
- Data Center Expansion: The company added nearly 1 gigawatt of data center capacity in Q2 to address the challenge of Azure service demand exceeding supply, demonstrating its ongoing investment and strategic positioning in cloud infrastructure.
- Rapid AI Application Adoption: Microsoft’s Copilot user base surged over 160% year-over-year to 15 million paid users, showcasing its ability to successfully leverage AI in enterprise workflows, further driving revenue growth.
See More
Hedge Fund Investment Dynamics Analysis
- Portfolio Adjustments: Hedge fund manager Daniel Loeb sold 23% of his Amazon and 16% of his Microsoft shares in Q4, yet these stocks remain the third and fourth largest positions in his portfolio, each accounting for over 6% of assets, indicating his continued confidence in these companies.
- Nvidia's Sustained Growth: Loeb increased his stake in Nvidia, which has seen its stock price soar over 1,200% since 2023, and reported $68.1 billion in revenue for the latest quarter, a 73% year-over-year increase that surpassed the expected $65 billion, highlighting its strong demand and market dominance in AI.
- Performance of Microsoft and Amazon: Despite Loeb's reductions, Microsoft achieved a 17% year-over-year growth in its latest quarter with robust cloud computing performance, while Amazon's cloud division reported its best quarter in over three years, showcasing both companies' competitive strength in the market.
- Investment Recommendations: Although Loeb's sell-off raises concerns, analysts suggest that Microsoft's relatively low valuation and significant growth potential make it a strong buy, while Nvidia remains the most attractive investment option, encouraging investors to consider following Loeb's lead in acquiring Nvidia shares.
See More
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- Impressive Performance: Nvidia achieved a record $215.94 billion in revenue for fiscal 2026, with net income reaching $120.07 billion, demonstrating strong profitability and market demand, and is expected to continue leading the 'Magnificent Seven'.
- Robust Cash Flow: The company generated $96.58 billion in free cash flow, sufficient to cover $41.1 billion in stock repurchases and dividends, indicating a healthy financial position that supports future investments and growth.
- Increased R&D Investment: Nvidia launched the Blackwell architecture in March 2024 and unveiled the Rubin platform in January 2023, showcasing its ongoing innovation in AI aimed at eliminating workload bottlenecks and enhancing market competitiveness.
- Expanding Customer Base: By investing in Anthropic and OpenAI, Nvidia is broadening its customer base and is expected to benefit from the growing demand for AI, solidifying its leadership position in the data center market.
See More
Investment Dynamics Analysis on Amazon and Microsoft
- Portfolio Adjustments: Billionaire hedge fund manager Daniel Loeb reduced his stakes in Amazon and Microsoft by 23% and 16% respectively during Q4, yet both stocks still represent over 6% of his portfolio, indicating continued confidence in these companies.
- Strong Microsoft Performance: Microsoft achieved a 17% year-over-year growth in its latest quarter, particularly excelling in cloud computing, with a revenue backlog that spans multiple years, underscoring its competitive strength in the market.
- Amazon Cloud Recovery: Amazon's cloud computing division reported its best quarter in over three years, attracting investor attention despite overall stock performance being lackluster in 2026, reflecting strong financial metrics.
- Nvidia's Ongoing Strength: Nvidia reported a revenue of $68.1 billion in the latest quarter, up 73% year-over-year and exceeding expectations, while its price-to-earnings ratio is near its lowest level in three years, highlighting its continued attractiveness as an investment.
See More
Nvidia's Earnings Exceed Expectations Amid Surge in AI Demand
- Strong Financial Performance: Nvidia achieved a record $215.94 billion in revenue for fiscal 2026, with net income reaching $120.07 billion, showcasing robust profitability and cash flow that solidifies its leadership in the semiconductor industry.
- Shareholder Return Strategy: The company allocated $41.1 billion for stock repurchases and dividends in fiscal 2026, indicating its strong cash flow capabilities and commitment to shareholders, which is expected to boost investor confidence.
- AI Market Potential: Nvidia is targeting $78 billion in revenue for Q1 fiscal 2027 with a gross margin of 75%, representing a significant 76.9% year-over-year increase, reflecting its market leadership amid surging AI compute demand.
- Strategic Investment Expansion: Nvidia announced a $10 billion investment in Anthropic and is close to investing $30 billion in OpenAI, demonstrating its strategic positioning in the AI sector and commitment to emerging technologies, further broadening its customer base.
See More
Analysts Bullish on Nvidia and Microsoft Price Targets
- Nvidia Growth Potential: Analysts project a price target of $256 for Nvidia, indicating about a 40% upside from Monday's closing price of $180.12, reflecting its strong growth potential amid surging AI spending, with expected revenue of $78 billion for Q1 FY2027, representing a 77% year-over-year increase.
- Microsoft Valuation Recovery: Microsoft has a price target of $596; despite recent stock declines due to unmet market expectations, its 17% quarterly revenue growth demonstrates robust fundamentals, with projected revenue growth of 16% and 15% over the next two fiscal years, indicating its ability to outperform the market.
- Market Reaction Analysis: Although Nvidia and Microsoft's stock prices face short-term volatility, analysts generally believe both stocks possess significant upside potential in the long term, particularly against the backdrop of ongoing investments in AI and cloud computing, which may attract more investor interest.
- Investment Recommendation: With the overall market recovering, Nvidia and Microsoft are viewed as
See More
