Over the past six months, Microsoft shares fell about 10%. Analysts say the stock now sits at a crossroads.
Investors point to AI growth led by Azure, which grew about 40% year over year. That expansion is expected to continue into 2026 as enterprise AI deployments scale.
Microsoft’s investments in OpenAI are yielding indirect gains through increased cloud demand. (Ed. note: OpenAI expects about $115 billion in losses through 2029, largely tied to data-center spending.)
Analysts expect Microsoft to be a major benefactor as those data centers expand. Current price targets mostly range from $600 to $650, while the stock trades near $454.
Bernstein and Piper Sandler hold the highest targets at $645 and $650 respectively. Markets view the upcoming earnings report as a pivotal moment for the AI story.
Morgan Stanley projects software spending growth will rise nine basis points year over year to 3.8% in 2026. CIOs surveyed expect roughly 7.3% growth for Microsoft next year.
Wedbush analyst Dan Ives called Microsoft an “core winner” for 2026, saying Azure could move from pilots to broad enterprise deployments. Evercore ISI’s Julian Emanuel urged caution but said systemic risks appear limited given healthy hyperscaler balance sheets and muted cross-holdings.
