Rothschild Redburn downgraded Microsoft stock from Buy to Neutral, lowering its price target to $500 from $560. The downgrade is rooted in concerns about the high cost of generative AI, with the firm's analysis indicating that AI investments require about six times more capital expenditure to generate revenue compared to traditional cloud services. This increased capital intensity could pressure long-term cash flow. The research also pointed to potential "value leakage" as Microsoft integrates AI models from partners like OpenAI and Anthropic, which could shift value away from Microsoft itself. While Microsoft remains a key player in the AI space and maintains a strong "Buy" consensus from most analysts, this downgrade introduces a more cautious view on the financial returns of its extensive AI strategy.