Microsoft (MSFT) President Brad Smith is pushing back a week after the Trump administration cut the company off from a key green-card program. In a Politico interview published on Thursday, Smith said that blocking permanent residency for skilled immigrants could “cripple” the U.S. tech sector for more than a generation, Reuters reported.
Microsoft stock has more than made back its announcement-day drop. It closed at $533.69 on October 14, up from the $522.61 it fell to on October 8 and about 4% above its October 1 close of $512.80. That builds on a run of nearly 39% from June 30 to early October.
Smith Calls Vance’s Claims “Off Base”
On October 8, the Labor Department suspended Microsoft, Adobe and six IT outsourcers from PERM, the labor certification that starts most employment-based green cards. New filings are blocked and pending ones are frozen. Vice President JD Vance said Microsoft laid off 6,000 American workers last year while benefiting from 6,300 H-1B visas and nearly 3,000 green cards. He added that the suspension would last as long as it needs to.
Smith called those accusations “completely off base.” He said Microsoft pays foreign-born and U.S.-born staff on the same compensation system, and that it hired more than 9,000 U.S.-born workers last year. His wider argument is that closing the path to permanent residency pushes skilled engineers to build their careers in other countries.
Smith’s Talent Argument, in Microsoft’s Numbers
Start with the administration’s own figure. Vance cited 3,682 Microsoft PERM applications. That counts applications, not employees stuck in the freeze today, and the suspension also blocks filings Microsoft hasn’t made yet. For scale only, 3,682 equals about 3% of the 121,000 people Microsoft employed in the U.S. as of June 30.
The bigger shift is in how Microsoft spends on talent. R&D expense rose from $29.51 billion in fiscal 2024 to $35.56 billion in fiscal 2026, up 20.5%. Over the same period, its product R&D headcount fell from 81,000 to 77,000.
That works out to about $462,000 of R&D spending per R&D employee, up from about $364,000 two years earlier. Microsoft is putting more money behind each engineer it keeps, which supports Smith’s point that every hire matters. The application figures don’t say how many of those engineers are waiting on a green card today.
The Outsourcers Have Outrun Microsoft Stock
Six of the eight suspended companies are IT outsourcers, and their stocks have risen faster than Microsoft’s. Since the October 7 close:
- Cognizant (CTSH) is up 9.5%.
- Infosys (INFY) is up 9.7% on its India-listed shares.
- Adobe (ADBE), which was suspended alongside Microsoft over active federal investigations, gained 3.4%.
- Microsoft rose just 0.7%, and its 1.8% drop on October 14 widened a gap that was already there.
Those returns cover a week of other news, so they can’t isolate the visa decision. What they do show is that none of the four stocks has sold off since October 7. The risk worth watching is enforcement widening. Labor Secretary Keith Sonderling tied Microsoft’s case to multiple active federal investigations, and the PERM list grew from Cognizant alone in September to eight companies in October.
Conclusion
Smith is arguing about the next generation of U.S. tech, and that debate could run for years. For Microsoft shareholders, the missing piece is a headcount. The administration’s 3,682 figure counts applications, not employees caught in the freeze, so nobody has yet shown how far this reaches inside Microsoft. What the numbers do show is a company still raising R&D spending, up 20.5% in two years, while it runs a smaller R&D team. The October 28 earnings call is the first chance for CFO Amy Hood to put a number on it.
Want to check whether Microsoft’s R&D spending keeps outpacing its headcount, or how the suspended companies trade from here? Pull up the same R&D trend and peer price charts on TIKR for free. Learn more here.
So what is Microsoft stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what MSFT stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Value Microsoft Corporation for free→
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
