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Years ago, I got into a Tesla-heavy fund before anyone believed in him. Back when the "smart money" said electric cars were a joke. When the media was writing his obituary every other week.
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Macroeconomic Strategist, The Oxford Club
P.S. I've bet on Elon before and won. Now I'm doubling down. Just click on this link to see how to join me.
Waiting for Walmart to Pull Back? Now's the Time to Buy
Submitted by Thomas Hughes. Date Posted: 2/19/2026.
Key Points
- Walmart is creating a buying opportunity for investors following weaker-than-expected F2027 guidance.
- The uptrend remains intact, with analysts suggesting a 10% upside from the early 2026 highs.
- Cash flow, capital return, and institutional support underpin the price action.
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Investors who waited for a pullback in Walmart (NASDAQ: WMT) shares are being rewarded. The stock peaked ahead of the Q4 2026 earnings report and has since begun to decline. Technical indicators suggest the stock remains in a longer-term uptrend but could pull back into the $120 to $110 range before finding a bottom and rebounding. If that happens, upside potential — including dividends and share-price gains — could translate into a low-double-digit CAGR over the coming years.
Walmart's stock-price action is driven as much by cash flow as by growth. Strong cash flow supports a healthy balance sheet and funds ample, reliable capital returns and reinvestment that are expected to increase over time. The dividend yield was about 0.8% in mid-February 2026, with a payout ratio near 35% of earnings outlook and a 52-year streak of consecutive increases. Share buybacks are also consistent, reducing the share count each quarter; the board recently authorized a new $30 billion program, roughly 3% of the pre-release market cap.
Analysts' Caution Doesn't Mean Sell: A Buying Opportunity Emerges
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Analysts expressed some caution after Walmart's Q4 report, but overall remain constructive and support the stock's outlook. MarketBeat tracks 35 analyst reports (published within the past 12 months), showing increased coverage, firmer sentiment and a roughly 94% buy-side bias. The consensus price target has risen about 30% over the trailing 12 months and climbed up to the release.
Recent updates include an upgrade to Strong Buy from Argus and several target increases or reiterations, pushing the top of the range to $150. That level would be notable — roughly 10% above the stock's prior all-time high.
The technical setup looks favorable. Although price action peaked before the report, the move appears to be part of a broader uptrend that remains intact.
Indicators align with that view: MACD, in particular, shows convergence with the latest high and the strongest peak on record.
Taken together, these signals point to a strengthening market that should at least retest the recent high after the current pullback. A retest would be the minimum target; pushing to new highs is a distinct possibility.
Institutional ownership accounts for roughly 25% of Walmart shares, while the Walton family holds an estimated 50% or more. Together, these groups control nearly 80% of the company.
Institutional investors have been net buyers: over the trailing 12 months they purchased at a pace of more than $2 for each $1 sold, and activity ramped up in early Q1 2026. In January and early February the ratio approached $2.50 bought for every $1 sold, coinciding with Walmart shares reaching record highs. That behavior suggests a meaningful support base ready to buy near or just below the $120 target.
Walmart Guidance: Conservative in the Face of Bullish Trends
Walmart's guidance was conservative. The company issued Q1 and full-year 2027 revenue and earnings guidance below consensus, while still forecasting growth, margin resilience and robust cash flow. Given Q4's outperformance and strength in key consumer channels, that guidance appears deliberately cautious.
eCommerce was a standout, up 24% systemwide, helped by same-day pickup and delivery. The advertising business grew 37% globally and 41% in the U.S. On the core retail side, Walmart U.S. comps rose 4.6%, supported by higher ticket and traffic; Sam's Club comps increased 4%, aided by a 6.9% rise in membership fees; and International comps grew 7.5%.
Margins improved modestly and benefited from expense control. The company delivered a 10.5% increase in currency-neutral operating income (10.8% reported), a 12.1% rise in adjusted earnings and 18% growth in free cash flow. Looking ahead, management expects about 4.5% revenue growth — a slight slowdown from this year. One reason to view that guidance as conservative: reported tax refunds this year have averaged roughly 10% more than last year's.
Microsoft Is Sliding—An Insider Buy and Oversold Signals Are Changing the Setup
Author: Chris Markoch. Article Posted: 2/24/2026.
Key Points
- Microsoft’s sharp decline reflects investor anxiety over heavy AI infrastructure spending, but the company continues to fund expansion with strong free cash flow.
- Concerns that AI could disrupt traditional software models overlook how Microsoft is embedding Copilot into its ecosystem and charging premium pricing.
- With insider buying emerging and valuation compressing to more typical levels, the sell-off may signal exhaustion rather than structural weakness.
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It's been another week of relative misery for Microsoft Corp. (NASDAQ: MSFT) shareholders. For the week of Feb. 16–20, MSFT stock fell 3.28%. That continues the stock's run of lackluster performance. MSFT stock is:
- Down 17.05% in the 30 days ending Feb. 20.
- Down 20.08% year-to-date.
- Down 18.14% in the last three months.
All of that has left Microsoft stock down about 5.3% over the past 12 months — a fall from grace many investors didn't anticipate.
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However, pullbacks like this in a blue‑chip name often create buying opportunities. That may be the case after a recent insider purchase.
John W. Stanton, a director at Microsoft, purchased 5,000 shares of the company's stock on Feb. 18. Insiders typically buy because they believe a stock is undervalued. One purchase doesn't make a trend, but it is a data point in the argument that MSFT may be oversold.
By now, the reasons for the pullback are familiar. In some respects, Microsoft checks many of the boxes investors use when deciding to trim exposure to technology stocks:
- The company is one of the leading hyperscalers and has committed billions in capital expenditures (CapEx) to build out its AI infrastructure (i.e., datacenters).
- Microsoft is caught up in the "AI will eat software" sell‑off.
- Analysts are questioning the return on investment for the company's stake in OpenAI.
All of these concerns merit a balanced look to put the MSFT sell‑off into context.
Hyperscaler CapEx Concerns
Microsoft is one of the "big three" hyperscalers, alongside Amazon.com Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOGL). In Q2 fiscal 2026, Microsoft spent $37.5 billion on CapEx.
This level of spending, which isn't expected to decline, worries investors who want to know how long it will take to generate returns that justify the outlay. Rising energy costs, long construction timelines and uncertainty about whether AI demand will scale fast enough to absorb the added capacity have all heightened concern.
It's worth noting, though, that Microsoft is funding this CapEx with cash on hand. Evercore ISI recently forecast that, among the hyperscalers, only Microsoft will generate positive free cash flow this fiscal year.
The takeaway: Microsoft's core business is profitable enough to fund expansion without burning through cash. That supports the company's claim that much of the AI spending is tied to contracted customer commitments, not purely speculative build‑outs.
The "AI Will Eat Software" Threat
At its core, Microsoft is a software company: Windows, Office and related licensing remain central to its recurring revenue. The rise of agentic AI has prompted questions about whether that licensing model will hold up, or whether AI could cannibalize some of Microsoft's most profitable businesses.
But that view treats Microsoft as a passive observer. In reality, Copilot — Microsoft's agentic AI tool — is already being integrated across the Microsoft 365 suite. That allows Microsoft to layer AI revenue on top of existing revenue and to command higher per‑seat pricing.
Put simply, enterprise customers aren't abandoning Microsoft's ecosystem; many are paying more to access AI capabilities inside it. That dynamic can help protect and even expand Microsoft's ARR (annual recurring revenue).
The OpenAI Investment Under the Microscope
Microsoft has invested an estimated $13 billion in OpenAI. That made strategic sense when OpenAI led the AI frontier, but the competitive landscape has grown more complex.
The emergence of rivals such as DeepSeek showed that capable AI models can be developed at a fraction of the cost, raising questions about the durability of OpenAI's technological moat. There's also structural tension: OpenAI pursues its own commercial relationships and ambitions that don't always align neatly with Microsoft's interests. Analysts are increasingly asking whether Microsoft is getting an adequate financial return relative to alternatives.
However, treating the OpenAI investment purely as a financial wager misses the strategic value. Microsoft secured deep integration rights, model access and the ability to attach the world's most recognized AI brand to its products. Microsoft has also continued to develop in‑house models in parallel, so it isn't solely dependent on OpenAI. The partnership provided Microsoft a multi‑year head start in enterprise AI adoption that competitors can't easily replicate.
Selling May Be Nearing Exhaustion
There's no getting around it: the MSFT chart looks ugly. The stock has been in a steady downtrend since November 2025 and is within roughly 10% of giving back all the gains from the rally that began in late April 2025.
However, the Relative Strength Index (RSI) is moving into oversold territory, and momentum indicators such as daily volume and the MACD suggest selling pressure may be waning.
That said, this remains a headline‑driven market and more downside is possible. Still, with MSFT down almost 30% from its all‑time high and trading at roughly 24x earnings, this looks like a dip worth considering for long‑term investors.
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