Microsoft Wants to Power Retail Without Competing With It

Key Points

• Microsoft is utilizing AI tools like Copilot Checkout to enter digital commerce without directly competing with retailers.
• The company’s “trusted infrastructure” strategy could attract merchants who want AI capabilities without giving up customer data or control.
• Analysts remain bullish on MSFT stock as Microsoft’s position in the AI stack supports long-term growth into 2026 and beyond.

Many investors were focused on the Consumer Electronics Show (CES) in Las Vegas last week. However, one tech giant made news of its own at NRF 2026, the retail industry’s annual conference in New York.

Specifically, Microsoft Corp. NASDAQ: MSFT announced the rollout of Copilot Checkout. This is one way that Microsoft is using artificial intelligence (AI) to push into agentic commerce. With Copilot Checkout, users can complete purchases directly within its AI chatbot. This allows the retailer to remain the merchant of record, handling fulfillment and customer service.

Microsoft already sits at the center of how large retailers run supply chains, manage customer data, and integrate third-party software. The company believes its embedded position, which allows Microsoft to offer AI tools, data platforms, and automation capabilities, will give it an edge over other rivals such as OpenAI, Alphabet Inc. NASDAQ: GOOGL and Amazon.com Inc. NASDAQ: AMZN by enhancing a retailer’s existing operations without asking them to hand over customer relationships or transaction data.

The 2 Sides of the Copilot Checkout Debate

It remains to be seen how quickly consumers will adopt chat-based commerce. Some critics argue that solutions like Copilot Checkout are akin to a new hammer looking for a nail, suggesting that e-commerce is not a problem that needs to be fixed.

However, Kathleen Mitford, corporate vice president of global industry marketing, makes the argument that consumer behavior is shifting faster than the market may be giving it credit for. Support for her argument comes from the rapid adoption of AI by businesses in the past year.

If Milford is correct, Microsoft is positioned as the “trusted operating system” for enterprise commerce. It provides the AI layer, cloud infrastructure via Azure, and productivity that works behind the scenes, while allowing merchants to retain ownership of their data.

The belief is that retailers want technology that can partner with them without becoming a competitor. That’s the lane that Microsoft is targeting as it tries to increase the Copilot market share, which is just a fraction of ChatGPT.

Analysts Remain Bullish on Microsoft

A feature like Copilot Checkout may not be enough to drive MSFT stock higher.

However, on Jan. 12, Goldman Sachs initiated coverage on the company with a Buy rating and a $655 price target.

In doing so, the firm refuted concerns about AI spending as a near-term drag with an uncertain payoff.

Instead, it cited the company’s positioning in the AI stack.

Specifically, Goldman Sachs remarked that Microsoft is the best placed among large-cap technology stocks to benefit from “compounding AI product cycles.”

Is MSFT Stock a Buy?

MSFT stock is starting out 2026 in the same way it exited 2025. It’s down about 1.05% with about two weeks to go before earnings. The stock has been in a broad sell-off, which has pushed it down over 6% since the company last reported earnings at the end of October 2025.

However, the MSFT stock chart does have an attractive setup. For starters, it shows what looks to be a constructive consolidation phase. The stock has repeatedly tested and held a price near the 200-day simple moving average (SMA). That suggests this is a level that institutions are willing to defend.

Additionally, the price has stabilized, resulting in less volatility, and the MACD has begun to stabilize near the zero line. All of this is consistent with traders digesting prior gains rather than a breakdown from the existing trend.

By the way, MSFT stock remains in a bullish, long-term uptrend. That could change if the stock makes a deep contraction below the 200-day SMA on heavy volume. But for now, the argument still appears to be on the side of the bulls.

The company’s earnings report, which is scheduled for Jan. 28, could be the next strong catalyst for MSFT stock. For now, patience and a scaled approach may be better than aggressive buying.