Microsoft (MSFT) Stock Has Been Lagging Big Tech – But a Turnaround May Be Near, Say Analysts

Microsoft (MSFT) may not have led the tech rally this year, but some analysts believe the stock is starting to turn around. Evercore ISI’s (EVR) Rich Ross said that Microsoft currently has one of the strongest technical setups in the sector, and noted that the stock has moved back above its 50-day moving average with strength. In addition, he pointed out that the stock recently bounced off a long-term support level that has held for years, even going back to the European financial crisis. Because of this, Ross believes that the tech giant is now attractive from both technical and fundamental perspectives.

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Even so, Microsoft has lagged behind other major tech names so far this year. The stock is down about 10% after weaker-than-expected results and concerns about heavy AI spending. Meanwhile, other Magnificent Seven stocks have performed much better. Nvidia (NVDA) is up around 12%, thanks to strong AI demand, while Amazon (AMZN) has gained about 13% following new AI investments and cost cuts. Alphabet (GOOGL) is also up roughly 12%, and Meta Platforms (META) has rebounded sharply in recent weeks. On the other hand, Tesla (TSLA) is down 15%, while Apple (AAPL) has slipped slightly.

That said, some analysts believe that sentiment could start to improve for Microsoft. Specifically, five-star Wedbush analyst Dan Ives noted that the market may be underestimating Microsoft’s long-term growth potential, especially as AI begins to play a larger role in its business. As a result, he sees Microsoft as one of the more attractive large-cap tech stocks to own over the next few years, particularly if the company can deliver stronger growth in the second half of the fiscal year.

What Is the Price Target for Microsoft?

Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys and two Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average MSFT price target of $565.77 per share implies 32.7% upside potential.