Microsoft Eyes First Record in Nearly a Year as AI Rally Builds

Microsoft Corp. shares are on pace to close at their first record in nearly a year as the software maker’s four-month rally gains momentum.

The stock rose as much as 1.8% to $551.13 as of 9:56 a.m. in New York, putting it on track to take out a record that has stood since October 2025. Microsoft has gained more than 50% from a June low, adding roughly $1.5 trillion in market value, as sentiment toward the company and its position in artificial intelligence continues to improve.

The milestone caps a dramatic reversal for Microsoft, which just a few months ago was among the worst performers in the S&P 500 Index amid concerns that heavy spending on AI infrastructure wasn’t generating sufficient returns, as well as fears about potential disruption facing software providers. The stock dropped 17% in June, its worst month since 2000, erasing nearly $600 billion in market value.

That all changed with a July 29 earnings report that revealed the fastest revenue growth for Microsoft’s cloud computing business in four years. The stock jumped 16% the following day, setting the stage for a rebound that resulted in Microsoft’s best quarterly showing since 1998.

At least two firms raised their ratings on the stock to buy in the wake of the July earnings report, expressing confidence in Microsoft’s ability to capitalize on demand for AI services.

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Of the 72 analysts tracked by Bloomberg that cover Microsoft, 68 now have buy ratings and there are no sells. The average price target on the stock of $584, implies upside of about 8% over the next 12 months from Monday’s close, according to data compiled by Bloomberg.

Despite Microsoft’s recent gains, the stock remains a laggard in 2026 due to its first half slump. The shares have risen about 14% this year, compared with 21% advance for the tech-heavy Nasdaq 100 Index and 14% for the S&P 500.

Of the so-called Magnificent Seven tech giants, Microsoft’s performance is roughly in line with Meta Platforms Inc., Alphabet Inc. and Amazon.com Inc., but lags both Apple Inc. and Nvidia Corp., which are up more than 20% each.