The Art of the Turnaround: Microsoft, Power Metallic Mines, innoscripta and CTS Eventim Prepare for a Comeback

Microsoft: The moment of truth

The first half of 2026 was a sorry affair for Microsoft shareholders. By the end of June, shares in the US software giant had lost almost 23%. The concern: the massive investments in data centres and artificial intelligence (AI) might not pay off. However, with the report for the fourth quarter of the 2025/26 financial year, the downward trend was history. Group revenue rose 18% to USD 90.0 billion between the beginning of April and the end of June, while the Azure cloud platform grew 43%. “In this financial year, Azure revenue exceeded the USD 100 billion mark for the first time”, said a delighted CEO Satya Nadella. Shares jumped more than 15% in a single day, bringing the gain since the end of June to just over 40%.

The next test comes today after the US market close. For the first quarter of 2026/27, analysts expect average revenue of around USD 90.6 billion. That would be almost 17% more than in the previous year. Earnings per share are expected to climb from USD 4.13 to around USD 4.72. An unofficial “whisper estimate” of USD 4.93 is even circulating among traders. But the real benchmark is Azure. The group has indicated growth of around 45%. Cloud service price increases of 6 to 7% for business customers, effective from October 1, are providing a tailwind. In addition, Volkswagen has ordered licences for the AI assistant Copilot for 330,000 employees. 

Market participants will also scrutinise investment spending. More than USD 50 billion is likely to have flowed into data centres and AI infrastructure between July and September alone. Sceptics doubt whether this will always deliver the hoped-for return. For example, Microsoft unexpectedly pulled out of a major data centre project in the UK, partly because of limited power capacity. However, optimistic voices predominate. Analysts at Jefferies, RBC and JPMorgan see significant upside potential, with price targets of between USD 625 and USD 650. After a positive start to the week, the shares are trading at USD 527.90 (currently EUR 474.10 in Germany). Further share price gains of around 20% are therefore possible over 12 months, provided tonight’s figures do not disappoint.

Power Metallic Mines: Copper from the depths

The AI boom from which Microsoft is benefiting would be inconceivable without copper. Data centres, power lines and transformers consume enormous quantities of the red metal. Its price is correspondingly high. On the London Metal Exchange (LME), a tonne costs almost USD 14,500, just a whisker away from the record high of just over USD 14,600. A Canadian company few market participants have on their radar could benefit. Power Metallic Mines is exploring the Nisk project in northern Québec. There, geologists discovered the Lion Zone, a deposit containing copper, palladium, platinum, gold, silver and nickel.

In September, the company presented the first resource estimate for the Lion project. It comprises 4.75 million tonnes of rock with an average copper equivalent grade of 3.9%. This metric effectively converts all the metals contained into copper. Around 87% of the resource is already classified as “indicated”, meaning it is well supported by drilling. About 60% lies close enough to surface to allow open-pit mining. Lab tests by testing institute SGS yielded copper recoveries of more than 98%. And the deposit remains open in several directions. On September 22, Power Metallic also reported a 5.70 m interval at a depth of around 800 m grading 14.00% copper equivalent, including 2.15 m at 24.62%. The drill hole is about 25% deeper and is not yet included in the resource estimate.

The next step is a Preliminary Economic Assessment (PEA). In early October, Power Metallic commissioned engineering firm BBA to carry it out, with results expected in the first half of 2027. “With the appointment of BBA, strong engineering expertise is supporting our next major milestone”, says CEO Terry Lynch. The assessment will be paid for from existing funds. CEO Lynch explains more in an interview with IIF presenter Lyndsay Malchuk:

In June, the company raised CAD 28.2 million through a capital increase, with legendary commodities investor Eric Sprott also buying in. On the stock market, however, the potential of the polymetallic deposit in Québec is barely reflected. At the beginning of September, the shares still cost just over CAD 1.50. Despite record copper prices and strong drilling results, the share price has since fallen back below CAD 1.00, and this despite positive analyst comments. London-based Hannam & Partners raised its target by 13% to CAD 2.70 following the resource estimate. Notably, the British analysts assume a copper price of only USD 8,500 per tonne in their base case. Augsburg-based analyst firm GBC Research also recommends the shares a Buy and sets a price target of CAD 3.00. Both targets are therefore roughly three times the current share price. Will that be enough for a Microsoft-style turnaround? Financial results are unlikely to influence the share price of a company that is still exploring and not yet producing. Further announcements of new drilling successes and operational progress, on the other hand, will. A start toward a revaluation has been made, with the shares rising 5% at one point at the start of the week. They are currently trading at around CAD 0.89 (EUR 0.57).

innoscripta: The plunge and the question of responsibility

Without research, there is no progress, neither in mining nor in other industries. The German state supports research and development. Upper Bavaria-based company innoscripta makes its living from this, with its Clusterix software facilitating applications for research tax allowances. The application process has two stages: first, the Research Allowance Certification Office checks whether a project is eligible for funding. This certification generally gives rise to innoscripta’s fee. The customer (or their tax adviser) then applies to the tax office for the allowance itself. Operationally, things are going brilliantly. In the first half, revenue rose 43% to EUR 63.1 million, while adjusted operating profit (EBIT) increased 49% to EUR 36.4 million. innoscripta now serves customers in 14 countries.

But on October 1, the shock came. Investigators searched the sites in Tutzing and Munich. The suspicion: aiding and abetting the obtaining of unjustified tax benefits through research allowances for individual customers. The shares plunged more than 50% in a single day, falling from just under EUR 90 to below EUR 40. “The search took us completely by surprise”, said CEO Michael Hohenester. According to the information currently available, no transactions from the current financial year are affected. The former employee responsible has not worked for the company for years. The company has commissioned two external law firms to examine the allegations and its internal control processes.

Customers are responsible for the accuracy of the information provided to the tax office. A software provider can hardly be held liable for the behaviour of its users. The tax offices have already assessed several thousand allowances for innoscripta customers and confirmed them in tax audits. The investigations must establish whether individual employees crossed any boundaries beyond that. If the public prosecutor’s office reaches the same conclusion as the company, a re-rating is likely to begin here too. The shares have already recovered to EUR 51.30, rising by around 5% at the start of the week, likely also due to an analyst event on Monday. For the current year, management continues to forecast revenue of at least EUR 140 million and earnings before interest and taxes (EBIT) of EUR 80 million. At the end of August, Warburg analyst Yannick Siering still saw fair value at EUR 225. However, following the raid, Warburg suspended its rating and price target. The release of the next figures in the second half of November could provide momentum for a positive trend reversal. With a single-digit price-to-earnings (P/E) ratio for the current year and an expected dividend yield of 5.6%, the shares would be a classic bargain in the software sector – as long as no further bad news follows.

CTS Eventim: The Activist’s Wake-Up Call

Another German company, one familiar to every concertgoer, had also lost more than half its value. Anyone in Europe who buys tickets for rock, pop, and classical music events, or even soccer games, often ends up at CTS Eventim. From a record high of EUR 108 in May 2025, the stock fell to around EUR 50. Weak annual results and a disappointing outlook in March, along with the surprise departure of CFO William Willms at the end of September, unsettled investors. Yet the business continues to grow. In the second quarter, revenue rose 13% to EUR 899.3 million, and adjusted EBITDA increased 6.2% to EUR 106.4 million.

Insiders took advantage of the sell-off. The KPS Foundation, closely associated with CEO and major shareholder Klaus-Peter Schulenberg, bought 193,000 shares at EUR 51.93 each on September 30 for about EUR 10 million. With a P/E ratio below 20, the stock was undervalued relative to its own history—and it still is. The turnaround finally came with the entry of the activist US investor Ananym Capital. Co-founder Charlie Penner sees 50 to 100% upside potential. He points to the valuation discount of about 44% compared to US competitor Live Nation and calls for more share buybacks, greater transparency, and more stable leadership. Penner emphasises that his involvement is “friendly”.

Analysts are largely optimistic. Deutsche Bank, Jefferies, and UBS set a fair value of EUR 100, while JPMorgan puts it at EUR 95. JPMorgan analyst Lara Simpson calls Ananym’s investment a “welcome catalyst for the share price”. Goldman Sachs is more cautious, with a Neutral rating and a target price of EUR 68. Based on the current share price of about EUR 62.40, this implies upside potential ranges between 9% and 60%. Third-quarter earnings will be reported on November 12, followed by the first investor day on November 20.

Conclusion: One has made it, three have what it takes

Microsoft has already broken out of its downtrend. Tonight, the software giant must show that the astronomical sums spent on AI data centres are well spent. Power Metallic Mines could still be poised for such a breakout. The high price of copper, a high-grade polymetallic deposit, and price targets at three times the current share price all point in that direction. Innoscripta and CTS Eventim have completely crashed but are already rebounding. Business continues as usual, though the stocks are still trading well below their previous levels. Valuations are at rock bottom, especially against their own historical performance, so a turnaround here should be only a matter of time.

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