Microsoft (MSFT) shares advanced on Tuesday, positioning the stock for its first record closing high since late October, as the company expanded its artificial intelligence infrastructure and reclaimed a market valuation above $4 trillion.
The stock gained 1.84% to $551.15 during the session, with shares trading around $548 at the time of writing. If gains hold, Microsoft would mark its first closing high since October 28, 2025, when shares ended at $542.07.
On Monday, Microsoft closed up approximately 1.2% at $541.15, pushing its market capitalization back above $4 trillion for the first time since October 2025. Investor sentiment has been buoyed by expectations that Azure, the company's cloud platform, and its Copilot AI assistant will drive additional revenue growth.
Barclays Raises Price Target to $600
Barclays raised its price target on Microsoft to $600 from $512 on Tuesday, maintaining an Overweight rating as part of its software sector review. The revised target implies roughly 11% upside from Monday's closing price.
Wall Street's broader outlook remains positive, with Microsoft holding an average Buy rating and an average price target of $584.48, based on estimates from 59 firms surveyed by FactSet. Morgan Stanley analyst Adam Wood also maintained an Overweight rating and a $600 price target on Monday.
In a research note, Wood said Microsoft was well positioned to maintain its lead in generative AI spending intentions and was poised to generate revenue from a market where businesses use multiple AI models. He added that Microsoft's strategic opportunity lies in monetizing enterprise AI workflows across its technology stack, reducing reliance on any single AI model becoming dominant.
The company has been expanding Copilot's capabilities to connect different tools and help businesses build, customize, and scale AI across workflows. These developments could support demand for Azure and its AI software offerings as enterprises increase their adoption of the technology.
Microsoft Unveils Maia 300 AI Chip
Microsoft introduced its latest artificial intelligence chip, the Maia 300, on Monday as part of its effort to deploy more custom-designed hardware across its data centers. The Maia 300 system consists of a server rack containing 96 Maia processors.
Microsoft plans to begin deploying the system in its cloud facilities in 2027, alongside its predecessor, the Maia 200. The company expects to run multiple gigawatts of AI workloads on Maia hardware starting next year.
Microsoft said the Maia 300 can process 40% more tokens per megawatt of power than leading GPU-based systems. Tokens measure the inputs and outputs involved in AI queries. The company also highlighted the chip's memory bandwidth as a competitive advantage.
More efficient hardware could help Azure and its Foundry AI software compete with Amazon Web Services and Google for businesses seeking infrastructure to run AI workloads. The move reflects a broader industry trend among major tech companies to expand the use of in-house chips and reduce reliance on expensive third-party processors.
AI Spending and Data Center Security
Microsoft's AI expansion requires substantial investment. Capital spending reached $41 billion in the fiscal fourth quarter and $145 billion for the full fiscal year. Wall Street expects the company to increase AI-related spending further in fiscal 2027, which began on July 1.
These investments could support future revenue growth, though their returns remain a key consideration for investors as spending escalates. Microsoft also announced a data center security initiative with Marvell Technology and Oracle, forming an Open Compute Project working group to standardize hardware security for data centers.
The group will focus on silicon-based security solutions, hardware security module attestation, and cryptographic key management at the server level. The initiative aims to reduce latency, improve scalability, and strengthen security for cloud computing workloads.
Microsoft's stock performance will remain closely tied to investor expectations for Azure, Copilot, and its broader AI business. With the company back above the $4 trillion mark, the stock is likely to stay a closely watched name on top investment platforms.
This article is for informational purposes only and does not constitute financial advice.
