Microsoft Stock Trending as Analysts Double Down

(MSFT) stock has gained 7.98% over the past 12 months, even after slipping 2.30% in the last week and 5.17% over the past month. Despite this recent pullback, Wall Street’s analysts remain strongly positive: the 12‑month consensus points to a price target of $630.32, well above the last closing price of $459.86, and the overall rating on the stock is a “Strong Buy.” This implies meaningful upside over the coming year as investors look beyond short‑term volatility toward Microsoft’s longer‑term positioning in cloud and artificial intelligence.

One of the key voices backing Microsoft is analyst Derrick Wood, who reiterated his Buy rating on MSFT on January 20, 2026, while setting a price target of $625 per share. Wood’s target suggests substantial potential upside from current levels and aligns closely with the broader Street forecast. According to his track record, Wood ranks 2,332 out of 11,984 analysts, with a success rate of 47.78% and an average return of 5.10% per rating, giving investors some context on his past performance in stock picking.

Wood’s latest report focuses on Microsoft’s upcoming second‑quarter earnings, with particular attention on Azure, the company’s cloud computing platform and its central AI engine. He expects stable or slightly stronger demand for GPU and CPU infrastructure, forecasting around two percentage points of upside to his 37% constant‑currency Azure growth estimate. While he doesn’t foresee an immediate acceleration in growth due to capacity constraints, he believes these are temporary and that Microsoft is well positioned to serve AI workloads as more capacity comes online.

The analyst also highlights several bullish demand indicators that support his positive stance. In his 2026 Enterprise Software Survey, Microsoft ranked #1 for AI spending intentions, with 76% of respondents planning to allocate new AI budgets to Microsoft over the next year, ahead of Alphabet’s GCP and Amazon’s AWS. Microsoft also moved into the top spot for overall cloud spend intentions, overtaking AWS for the first time in this survey. Additional third‑party data on the big three hyperscalers suggests Azure’s growth is likely to remain close to 39%, while active data‑center leasing by Microsoft points to sustained and urgent efforts to add capacity.

Even with these encouraging signals, Wood acknowledges that Microsoft’s shares, down about 15% since the last quarterly print and trading at roughly 24 times his FY27 earnings estimates, could remain range‑bound in the near term until Azure growth re‑accelerates. He does expect a sharp pickup in remaining performance obligations (RPO) in the second quarter, helped by a $250 billion OpenAI‑related contract, though he doesn’t see that as an immediate catalyst for the share price. Overall, Wood reiterates his Buy rating but trims his price target to $625, reflecting broader sector pressure, while staying constructive on Microsoft’s medium‑term strength in AI and cloud “wallet capture.” Never miss a stock rating. Find all the latest ratings on TipRanks’ Top Wall Street Analysts page.