Pressure is building on Microsoft (MSFT) ahead of the company’s first-quarter financial results that are to be released on April 29.
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With its share price down 10% this year, Microsoft has been the laggard among the Magnificent 7 mega-cap technology stocks. As such, analysts and investors are looking for the company to turn things around when it reports what will be its fiscal third-quarter 2026 earnings.
Key will be Microsoft’s capital expenditures and efforts to monetize its artificial intelligence (AI) products and services. Part of the reason MSFT stock is down this year are concerns over the $120 billion the company plans to spend on its AI buildout. Showing some return on its investment will be critically important, say analysts.
Software Stock Worries
To be fair, MSFT stock has also gotten knocked lower this year over broader concerns that AI is going to disrupt software companies. While most analysts say that the worries shouldn’t apply to Microsoft given its size and the diversity of its business, the company still needs to demonstrate that it is benefiting from AI and not being harmed by the technology.
Microsoft recently announced that consulting firm Accenture (ACN) plans to roll out the company’s Copilot AI assistant to its 743,000 employees, giving a boost to its efforts to monetize the technology. Beyond AI, Wall Street will also be looking for continued growth in Microsoft’s cloud-computing business.
Is MSFT Stock a Buy?
Microsoft’s stock has a consensus Strong Buy rating among 35 Wall Street analysts. That rating is based on 33 Buy and two Hold recommendations issued in the last three months. The average MSFT price target of $570.30 implies 34% upside from current levels.
