eyeQ: answering the critical question tech investors face
Experts at eyeQ use AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Here, it asks if this is the micro catalyst for a rally.
27th January 2026 10:50
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
Microsoft
Macro Relevance: 79%
Model Value: $518.51
Fair Value Gap: -10.26% discount to model value
Data correct as at 27 January 2026. Please click glossary for explanation of terms. Long-term strategic model.
Earnings season is always important but arguably the results for the Magnificent Seven this quarter are more important than ever.
For years, the big US tech firms were the only game in town. But more recently the artificial intelligence (AI) investment theme has cooled as markets start to worry about the huge amounts of spending involved and just how profitable these companies will be going forward.
Microsoft Corp (NASDAQ:MSFT), for example, is off around 3.5% from the October highs as investors rotated into metals, cyclicals and other international stocks away from the US. But context is important: 3.5% is nothing in the big scheme of things when you consider MSFT’s stock price has doubled over the past few years.
So, this earnings season will go a long way to answering the critical question investors face - is this simply a consolidation pattern, a pause that refreshes? Or the start of a more meaningful bursting of the AI “bubble”?
The macro picture is interesting:
- Macro relevance is high (79%)
- Macro momentum fell hard at the end of last year - eyeQ model value for MSFT declined around 7.5% into year-end
- But, more recently, macro conditions have improved - eyeQ model value is up nearly 3% so far in 2026
- Why? Because our modelling shows the stock wants a weaker dollar and higher US inflation expectations, and that’s exactly what the new year has delivered so far.
The MSFT stock has fallen further and now sits around 10% cheap to the macro environment.
That’s enough to trigger a bullish signal from a purely systematic macro perspective. But clearly with earnings tomorrow night representing a major event risk, this is an occasion where a discretionary overlay would argue to wait.
More than MSFT’s actual results, the market will wait to gauge management’s forward guidance around capital expenditure and future profitability.
Going into tomorrow night’s results announcement, the good news is - for the first time in a long time - the bar is lower. That’s true in terms of analysts’ expectations for earnings, and in terms of macro suggesting a fair degree of bad news is in the price.
A good earnings call tomorrow could be the micro catalyst for a rally. And, if so, that’s a move that could be amplified by macro valuations looking cheap too.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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