Stock that politicians are buying heavily rises 50%
Back in June, it was one of the most reviled names among the entire US mega-cap group. Since then, it has gained over 50%, posted its best quarter in more than 3 decades, and roughly $1 trillion has returned to its market value. But what is interesting is who stepped up when the market was avoiding it. Members of the US Congress from both sides of the political spectrum bought it heavily this year. But what do these trades really say, and what is behind the turn in Microsoft's trend?
Key points
Microsoft added over 50% in just three months. But more interesting is who was buying the stock when the market was dumping it.
Politicians' purchases can look like a strong signal. In reality, they come with several major catches that can make copying them significantly harder.
Microsoft's turnaround is not just about a change in sentiment. Cloud, AI, and a huge backlog started posting numbers that changed the market's view of the entire investment cycle.
Even after a 50% rally, Microsoft may not look extremely expensive versus its biggest competitors. But comparing the hyperscalers reveals very different risk profiles.
Politicians nailed the period of maximum pessimism. But were their purchases actually a useful signal, or was the more important information publicly available all along?
Trades by US lawmakers are among the most-watched data in the market. Retail investors often read them as a signal because politicians are close to regulation, government contracts, and macroeconomic decisions. But the reality is more complicated.
Disclosed transactions are delayed by up to 45 days, are reported only in broad ranges, and a large share are executed by portfolio managers without direct input from the politician. Yet there are situations when purchases pile up at an unusual time and with unusual intensity. This year's story of one of the world's biggest companies is exactly that case. So does this stock have further potential?
From the worst month since 2000 to the best quarter since 1998
The first six months of 2026 were painful for Microsoft shareholders. The stock fell about 37% from its October 2025 high around $555 and intraday on June 25 touched $349.20, its lowest since late 2021. June itself was the company's worst month since December 2000.
The market was punishing concerns about returns on AI infrastructure investments, concentration on OpenAI, and slowing consumer segments like Xbox or Windows licenses to PC makers.
The turning point came on July 29 with results for the fourth fiscal quarter. The next day the shares jumped 15.5%, the biggest one-day gain since 2008, and for the whole third calendar quarter they added about 38%. Monday's closing price of $525.18 means a 50.4% gain from the bottom, although the stock is only about 8% higher year-to-date and still about 5% below its 52-week high.