Microsoft Corporation (MSFT) shares advanced approximately 2% in Wednesday trading, buoyed by a price target upgrade from Evercore ISI and a broadly positive analyst consensus ahead of the company's fiscal fourth-quarter earnings release later this month.
Evercore ISI raised its price target on Microsoft to $525 from $510, while maintaining an Outperform rating. The firm projects double-digit revenue and operating income growth for fiscal 2027, underpinned by sustained investment in artificial intelligence and strengthening momentum across the Azure cloud platform.
According to Evercore, Microsoft shares have traded in a relatively narrow range as investors await clearer signals on Azure revenue acceleration and the monetization trajectory of Microsoft Copilot. The brokerage expects Azure growth to pick up in the second half of the calendar year, with Copilot adoption continuing to improve.
Evercore also forecasts fiscal 2027 capital expenditures of approximately $210 billion, exceeding the Street estimate of roughly $180 billion. The firm believes capex growth could begin to normalize in 2027 after the current investment cycle, potentially serving as a catalyst for improved investor sentiment.
While Evercore turned more optimistic, several other brokerages trimmed their price targets without altering their positive recommendations. Citi Research lowered its target to $570 from $620 but maintained a Buy rating, noting that Microsoft is "increasingly strategically positioned in an era of optimizing token spend and AI efficiency." Citi analyst Tyler Radke expects a strong fiscal fourth quarter but cautioned investors to prepare for higher AI spending in fiscal 2027.
Wells Fargo also retained a constructive stance, acknowledging mixed expectations for the fourth quarter. The firm cited concerns about Microsoft's cloud market share and capital spending but said stronger Azure growth, AI adoption, and operating expense discipline could support a more robust fiscal 2027 outlook.
Mizuho lowered its price target to $490 from $550 as part of a broader revision across software stocks. However, the brokerage noted that its channel checks remained positive, with public cloud demand staying strong and AI adoption robust.
Microsoft is scheduled to report fiscal fourth-quarter earnings on July 29. Consensus estimates compiled by Fiscal AI project earnings of $4.24 per share on revenue of $86.66 billion. According to Koyfin data, 53 of the 56 analysts covering Microsoft rate the stock as a Buy or stronger recommendation, with the remaining three maintaining Hold ratings.
For context on recent Microsoft developments, see Microsoft Stock Dips Despite Layoffs as AI Capex Scrutiny Intensifies and Microsoft Stock Jumps 4% on Haleon AI Deal, Job Cut Reports.
This article is for informational purposes only and does not constitute financial advice.
