AI Is Going Well For Microsoft, But Cybersecurity Is Not – Microsoft (NASDAQ:MSFT)

Microsoft Corp (NASDAQ:MSFT) faces a significant security challenge, Tom Warren from the Verge reports. In recent years, a series of high-profile security breaches has shaken Microsoft.

A U.S. Cyber Safety Review Board report revealed that Microsoft’s security culture needs an overhaul. 

Warren writes that concerns are growing within the company that these attacks could significantly damage trust in Microsoft.

Microsoft’s engineering and security teams have been actively addressing these threats in response to ongoing attacks by Nobelium or Midnight Blizzard—the same Russian state-sponsored hackers behind the SolarWinds Corp (NYSE:SWI) incident.

This group recently spied on senior Microsoft leadership’s email accounts and even stole source code.

These repeated attacks have alarmed many within Microsoft, prompting efforts to bolster the company’s defenses and prevent further breaches. 

Historically, Microsoft has also been targeted by hackers from the Chinese government. 

The U.S. Cyber Safety Review Board described last year’s U.S. government email attack as a “cascade of security failures” that was preventable. 

At a recent internal leadership conference, Microsoft CEO Satya Nadella and President Brad Smith emphasized prioritizing security.

With AI and security as its primary focus, Microsoft faces new security risks as it rapidly deploys AI technologies and more customers move to the cloud.

Microsoft reporter Mary Jo Foley recently urged Microsoft to stop marketing security as a premium service, the Verge reports.

Similarly, former senior White House cyber policy director A.J. Grotto highlighted past issues where Microsoft upsold logging capabilities during the SolarWinds breach, making it difficult for agencies to assess their exposure.

Talking about earnings, analysts are optimistic about upcoming third-quarter results, anticipating strengthened growth in Azure, particularly from AI services and solid interest in CoPilot.

Analysts also flagged Microsoft’s potential AI-driven revenue and free cash flow acceleration, noting the growing importance of AI in Microsoft’s strategy and naming Microsoft as a top software pick.

Microsoft stock gained 43% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Technology (NYSE:XLK) and Fidelity MSCI Information Technology Index ETF (NYSE:FTEC).

Price Action: MSFT shares traded lower by 3.93% at $393.09 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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