In the past 52 weeks, Microsoft (MSFT) stock has remained mostly sideways. However, from June 2026 lows of $349, MSFT stock has rallied by 46.9%. The strong comeback has proved naysayers wrong, and there might still be juice in the rally.
Wells Fargo added the software giant to its Q4 list of tactical ideas with an “Overweight” rating and a Street-high price target of $725. Analyst Michael Turrin believes that valuations are attractive and several catalysts are lined up.
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The positives include a new reporting structure that will clearly show how AI investments are translating into revenue. Further, the company’s Ignite conference in November is expected to be “bigger than usual.” At the same time, Turrin believes that Microsoft is poised to “accelerate revenue across its major app businesses.”
Recently, Piper Sandler also reiterated its “Overweight” rating and opined that the “company's Copilot app and a boost from the E7 rollout of M365 Commercial” are likely to support growth.
Amidst these positive views, attractive valuations, and growth in Azure, MSFT stock seems poised for further upside.
About Microsoft Stock
Headquartered in Redmond, Microsoft is a technology company making digital technology and artificial intelligence available to individuals and businesses globally.
The company’s services include cloud-based solutions that provide customers with AI, software, services, platforms, and content. Further, the company also delivers relevant online advertising to a global audience.
Microsoft’s products include operating systems, server applications, business solution applications, software development tools, desktop and server management tools, and video games. The company also designs and sells devices, including PCs, tablets, gaming, and entertainment devices.
Overall, these products and services are provided through three business segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
For FY26, Microsoft reported revenue growth of 18% on a year-over-year (YoY) basis to $331.8 billion. For the same period, the company’s operating income increased by 21% to $155.2 billion.
Backed by strong growth, MSFT stock has trended higher by 38% in the past six months. However, a price-earnings ratio of 29.68 is indicative of the point that valuations are not stretched as the intelligent cloud business continues to drive growth.
www.barchart.com Azure and Cloud Will Continue to Drive Growth
For FY26, Azure surpassed $100 billion in annual revenue. In Q4, revenue from Azure increased by 43% on a YoY basis. Further, Microsoft has guided for 45% revenue growth in the coming quarter. The business, therefore, remains a key growth driver.
It’s also worth noting that for Microsoft Cloud, the remaining performance obligation increased by 84% on a YoY basis to $678 billion. This provides clear revenue and cash flow visibility.
Amidst these positives, the company’s capital expenditure swelled to $116 billion in FY26. However, free cash flow remained positive and as the Azure business continues to deliver robust growth. Further, with a backlog of $678 billion, the spending is demand-driven. A clearer Azure reporting in the coming quarters will also alleviate concerns related to the company’s earnings quality. In turn, value unlocking is likely, and MSFT stock can potentially trade higher.
Overall, even as the personal computing segment remains depressed, Microsoft is positioned for healthy growth and upside in cash flows. The company also returned $10.2 billion to shareholders through repurchase and dividends in Q4 FY26.
What Do Analysts Say About MSFT Stock?
Based on 51 analysts with coverage, MSFT stock has a consensus “Strong Buy” rating. While 41 analysts have a “Strong Buy” rating for the stock, five have a “Moderate Buy,” four have a “Hold,” and one analyst has a “Strong Sell” rating.
The mean price target of $566 represents a potential upside of 10% from current levels. Further, the most bullish price target of $725 suggests that MSFT stock could climb as much as 41% from here.
www.barchart.com On the date of publication, Faisal Humayun Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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