Microsoft Stock Poised for AI-Fueled Rebound, Analysts Say

Microsoft ( (MSFT) ) has been popular among investors this week. Here is a recap of the key news on this stock.

Microsoft is heading into its fiscal second-quarter 2026 earnings on January 28 with Wall Street firmly in its corner, despite a relatively modest 5% share price gain over the past year and a recent pullback in the stock. Analysts expect earnings per share of $3.91 and revenue of about $80.3 billion, implying robust year-over-year growth of roughly 21% and 15%, respectively, powered largely by artificial-intelligence-driven demand in its Azure cloud business and growing adoption of tools like Copilot. Management has guided to 37% Azure revenue growth for the quarter, a slight deceleration from 40% previously but still strong enough that many analysts believe Microsoft’s AI and cloud bets are far from fully reflected in today’s valuation.

Investor ownership is broad-based, with public companies and individuals holding over half of Microsoft’s float and Vanguard entities leading among institutions. Despite some target cuts across the Street—driven more by sector-wide multiple compression and valuation worries around AI than by Microsoft-specific weakness—sentiment remains very bullish: the stock carries a Strong Buy consensus based on 32 Buys and two Holds, and an average price target near $626, suggesting upside of roughly one-third from current levels. Several high-profile analysts highlight Microsoft’s massive backlog, including $250 billion in OpenAI commitments and $30 billion from Anthropic on Azure, along with new AI features and a reinvigorated Xbox pipeline, as reasons to see the recent correction as an entry point rather than a red flag.