Microsoft Stock Forecast: Trending Mixed Signals From Analysts

Microsoft (MSFT) stock has fallen 4.5% over the past week and is down 13.4% over the last month, though it still shows a modest 1.0% gain over the past 12 months. Despite the recent pullback, Wall Street’s analysts remain strongly positive overall, with a consensus rating of StrongBuy and a 12‑month average price target of $598.99, well above the last closing price of $414.19. In other words, the market is cautious in the short term, but the analyst community still expects substantial upside over the coming year.

Wall Street’s analysts are broadly bullish, forecasting a significant increase in $MSFT over the next twelve months based on that nearly $600 average target. This implies that, in aggregate, experts see Microsoft as a long-term winner in cloud and artificial intelligence, even after the stock’s recent volatility. However, not every voice is uniformly optimistic on the near-term path, and some see a period of consolidation ahead before any potential move higher.

One of the more cautious voices is analyst Brad Reback of Stifel, who recently shifted his stance on Microsoft. Reback downgraded MSFT from a more positive rating to Hold on February 5, 2026, and set a price target of $392.00, which sits below the current market price and therefore implies downside from here. His move stands in contrast to the broader StrongBuy consensus and highlights growing concern among some analysts about Microsoft’s nearer-term growth trajectory in cloud and AI.

Reback’s report argues that Wall Street’s expectations for Microsoft’s revenue and earnings in fiscal and calendar 2027 are too optimistic, especially given well‑documented supply issues in Azure and rising competitive pressure from Google’s GCP/Gemini and Anthropic. He sees limited upside from OpenAI‑related Azure usage and expects Azure’s growth to struggle to accelerate in the near term. At the same time, he forecasts sharply higher capital spending, with Microsoft’s FY27 capex rising to about $200 billion, and lower gross margins as more money is poured into short‑lived compute assets and costly AI R&D. In his view, unless capex growth slows below Azure growth or Azure shows a clear acceleration, the stock is unlikely to re‑rate higher.

From a valuation standpoint, Reback models roughly $18.70 in calendar 2027 earnings per share and derives his $392 target by applying a price‑to‑earnings multiple of about 21 times, a modest premium to the broader S&P 500. While he acknowledges that Microsoft is still well positioned over the long term to navigate the rapidly evolving AI landscape, he expects the company to enter a heavier investment phase that could pressure margins and keep the stock range‑bound for some time. This N‑star analyst ranks #1042 out of 11,984 on TipRanks, with a 51.10% success rate and an average return of 9.80% per rating. Never miss a stock rating. Find all the latest ratings on TipRanks’ Top Wall Street Analysts page.