Microsoft Deepens Ties with Mistral AI: Implications for MSFT Stock Investors
On July 21, 2026, Microsoft and French AI startup Mistral AI announced a major expansion of their strategic partnership through a multi-billion-euro agreement. Under the deal, Microsoft gains greater access to European GPU infrastructure, while Mistral integrates its Medium 3.5 and OCR 4 models into Microsoft Foundry and Copilot Studio. The partnership helps Microsoft address European regulatory concerns about AI concentration and provides a credible European AI offering distinct from OpenAI. Microsoft's Q3 FY2026 earnings exceeded expectations with revenue of $82.89 billion and EPS of $4.27. Despite a 23% decline over the past 52 weeks and a 19.6% drop in 2026, MSFT stock trades at 23.63 times forward P/E, below its five-year average. The company has raised dividends for 21 consecutive years, currently yielding 0.90%.
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