Microsoft (MSFT) stock is down 14% year-to-date as investors remain concerned about the company’s massive AI-related capital spending. Despite those concerns, top-rated Tigress Financial Partners analyst Ivan Feinseth remains highly bullish on the stock, raising his 12-month price target to $680 from $595 while maintaining a Buy rating. The new price target implies 65% upside from current levels.
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The bullish call follows Microsoft’s strong third-quarter FY26 results, where the company reported a 29% jump in Cloud revenue and a massive 123% increase in AI-related revenue. Feinseth believes those results further strengthen Microsoft’s position as one of the biggest winners in the ongoing AI boom.
Top Analyst Sees 65% Upside in Microsoft Stock
The 5-star analyst believes Microsoft’s AI business is just getting started. He says high demand for Azure Cloud and new AI tools will help the company grow its sales and cash flow much faster over the next few years.
He believes MSFT’s cloud AI infrastructure will become a much bigger part of its growth. While some investors are nervous about the company’s heavy spending on AI data centers, Feinseth believes these investments will help Microsoft stay ahead of competitors and bring in bigger profits later.
Another big win is Copilot. The analyst said this AI tool is helping Microsoft generate more revenue from its existing customers, while ensuring its software business keeps growing for a long time.
Feinseth also pointed to Microsoft’s strong balance sheet and steady cash flow, which allow it to spend big on AI without hurting its investors. This was clearly visible in the Q3 results, where Microsoft generated $46.7 billion in cash from operations and returned $10.2 billion to investors through dividends and buybacks.
Is Microsoft a Buy or a Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Microsoft stock based on 33 Buys and two Holds assigned in the past three months. Further, the average MSFT price target of $559.98 per share implies 35.27% upside potential.
