Why Wall Street Is Comfortable With Microsoft Stock Even as AI Trade Pressured

Microsoft stock received a number a price target increases even as the AI trade came under pressure. (Heather Diehl/Getty Images)

Key Points

• Several Wall Street firms raise their price targets on Microsoft despite pressure on the broader AI trade.
• Analysts believe Microsoft is well-positioned to boost revenue through its Azure cloud platform and its Copilot AI assistant tool.
• Microsoft’s capital spending reached $145 billion for the fiscal year, and Wall Street expects heavier AI spending in fiscal 2027.

The artificial-intelligence trade was under serious pressure on Thursday for a second day after many stocks suffered in the previous session. Microsoft stock, however, was rising Thursday as a handful of Wall Street firms made it clear there’s still plenty of upside.

While the AI trade took a hit, TD Cowen raised its Microsoft price target to $625 from $540 and Mizuho hiked its price target to $600 from $510. UBS analyst Karl Keirstead also raised his price target on Microsoft to $675 from $525 and Jefferies analyst Brent Thill boosted his to $650 from $575.

It was the latest signal that Wall Street remainss confident that Microsoft has become an AI winner.

Microsoft stock rose 0.4% to $535.85 on Thursday after ending Wednesday down 1.8%. Shares on Tuesday closed at a record high of $543.45, its first record since October 2025.

The Barron’s Daily

A morning briefing on what you need to know in the day ahead, including exclusive commentary from Barron’s and MarketWatch writers.

Email addressSubscribe

I agree to the Terms of Use, Privacy Notice and Cookie Notice.

I would like to receive updates and special offers from Dow Jones and affiliates.

Microsoft stock has been rising sharply since the end of June and Wall Street has turned increasingly bullish on the tech company and its AI strategy.

Analysts broadly believe Microsoft is well-positioned to boost revenue through its cloud platform, Azure, and its AI assistant tool, Copilot.

That excitement went up a notch recently after the company introduced new capabilities for Copilot that will connect different tools to build, customize, and scale AI across work flows.

That sentiment appeared not to be dented even as many AI stocks declined Wednesday and Thursday with CoreWeave sparking investor concern about debt and capital in the AI sector.

Even with broad sector concerns around capital and debt, Jefferies’ Thill noted that “despite elevated AI investment,” Microsoft’s “margins remain resilient.”

Keirstead, the UBS analyst, added that Microsoft stock’s recent performance has raised growth expectations, and that Azure and Copilot fundamentals support robust investor optimism.

Citi analyst Tyler Radke also raised his Microsoft stock price target to $636 from $600. Radke noted that data reinforce his view that Microsoft’s core productivity and public cloud franchise should accelerate as enterprises increase AI spending. The analyst added that Microsoft remains among the best positioned AI vendors.

Microsoft has bet big on Azure and Copilot with capital spending reaching $41 billion in the fiscal fourth quarter and $145 billion for the fiscal year. Wall Street thinks investors should brace themselves for heavier AI spending in fiscal 2027, which started July 1.

That AI spending could be worth it for Microsoft investors. They’ll receive a better idea of what’s in store when the company reports fiscal first-quarter earnings on Oct. 28.

Write to Kit Norton at kit.norton@barrons.com

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8