Microsoft Stock Forecast: Trending Bullish With AI Tailwinds

Microsoft (MSFT) stock has fallen 7.0% over the past week and 10.4% over the past month, yet it still shows a 5.2% gain over the last twelve months. Despite the recent pullback, Wall Street’s analysts are firmly bullish, with a StrongBuy consensus and a 12‑month average price target of $603.95 versus the last close of $433.50. That target implies significant potential upside over the coming year, reflecting confidence that Microsoft’s cloud and AI strategy can overcome near-term concerns around Azure growth and capital spending.

Two recent notes from top Wall Street firms highlight how analysts are looking past short-term volatility and focusing on Microsoft’s longer-term AI and cloud opportunity. Hannah Rudoff of Piper Sandler reiterated her Buy rating on 1/29/2026 with a $600 price target, while Gregg Moskowitz of Mizuho Securities also reiterated a Buy on the same day with a slightly higher $620 target. Both see Microsoft as one of the best positioned platforms to benefit from surging demand for generative AI and cloud infrastructure, even as current Azure growth is constrained more by capacity allocation than by customer demand.

Rudoff’s report emphasizes that demand for Azure continues to exceed supply, with Azure revenue up 38% year over year in constant currency—above guidance but just shy of investor hopes. She notes that Microsoft’s leadership is deliberately allocating capacity not only to Azure, but also to first‑party AI applications such as Microsoft 365 Copilot and GitHub Copilot, as well as to internal R&D. In her view, the current Azure growth rate mainly reflects these allocation decisions rather than any slowdown in end‑customer interest. She remains bullish on the stock and values Microsoft at 20x estimated 2030 EV/operating cash flow, discounted back, assuming $49 billion in net cash, while reiterating an Overweight stance.

Moskowitz, ranking 3,235 out of 11,984 analysts on TipRanks with a 52.53% success rate and a 2.8% average return per rating, describes Microsoft’s latest quarter as one of “good overall execution.” He points to total revenue of $81.3 billion, up 15% year over year in constant currency and ahead of Wall Street estimates. Azure’s 38% growth beat management’s own guidance of about 37%, though it fell slightly short of buy-side expectations, as Microsoft redirected capacity toward AI-driven first‑party applications and R&D. Importantly, he highlights that commercial bookings jumped an extraordinary 228% year over year, largely driven by massive Azure commitments from OpenAI and Anthropic, and he notes that management is guiding Azure to grow 37–38% again next quarter with capex expected to decline sequentially.

Both analysts underscore the importance of Microsoft’s commercial remaining performance obligations (RPO), which Rudoff notes have reached $625 billion, growing 110% year over year, with 45% tied to OpenAI and the remaining ~$350 billion growing at a healthy 28% from a broad base of products and customers. While they acknowledge risks such as intense competition, regulation, and data and privacy concerns, their shared view is that Microsoft’s AI-first cloud platform, enormous bookings pipeline, and disciplined capacity strategy support strong long‑term growth. Never miss a stock rating. Find all the latest ratings on TipRanks’ Top Wall Street Analysts page.