Microsoft shares moved higher on Thursday after five brokerage firms lifted their price targets on the stock, pointing to resilient demand for the company's Azure cloud business and widening enterprise use of artificial intelligence tools. The gains came even as much of the wider AI-linked trade remained under selling pressure.
The stock was recently up about 1.12% at $539.67, recovering part of a 1.8% decline from the prior session. Earlier in the week, Microsoft closed at a record $543.45 on Tuesday, its first record close since October 2025.
Analysts raise Microsoft price targets ahead of earnings
TD Cowen, Mizuho, Citi, UBS and Jefferies all increased their price targets while keeping positive ratings on the shares. The revisions reflect expectations that cloud demand, AI adoption and Microsoft's productivity software franchise can continue to support growth.
UBS analyst Karl Keirstead lifted his target to $675 from $525, the highest among the five firms. He kept a Buy rating, noting that Microsoft's 39% rally had already raised growth expectations, but that Azure and Microsoft 365 fundamentals continued to underpin investor optimism.
Jefferies analyst Brent Thill raised his target to $650 from $575. Citi's Tyler Radke moved his to $636 from $600, TD Cowen increased its target to $625 from $540, and Mizuho lifted its target to $600 from $510.
Azure and Copilot underpin the bullish outlook
TD Cowen sees room for stronger-than-usual Azure results, citing third-party data it tracks, a full quarter of Fairwater and expectations for improved growth at OpenAI. Mizuho analyst Gregg Moskowitz said the firm's third-quarter channel checks showed healthy trends, including strong public cloud and consumption data and continued AI adoption.
Citi's Radke said its chief investment officer survey and reseller checks supported expectations that Microsoft's productivity and public cloud businesses could accelerate as enterprises increase AI spending. Analysts view Azure and Microsoft's Copilot AI assistant as important drivers of future revenue growth, with recent Copilot capabilities designed to connect different tools and help businesses build, customise and scale AI across workflows.
Jefferies expects Azure's constant-currency growth guidance of 44% to 45% to leave room for upside, supported by AI demand exceeding supply and firm pricing. The firm also expects Microsoft 365 Commercial growth to accelerate from 15% to 17% in constant-currency terms as Copilot supports higher average revenue per user.
Thill said that despite elevated AI investment, Microsoft's margins remain resilient. He also noted that the stock traded at around 26 times next-twelve-month earnings, compared with its five-year average of 28 times.
Microsoft's capital expenditure reached $41 billion in its fiscal fourth quarter and $145 billion for the full fiscal year. Investors are expected to monitor whether further spending in fiscal 2027 can generate sufficient returns.
Earnings report will test expectations for AI growth
Microsoft is scheduled to report its fiscal first-quarter results after the market closes on October 28. Consensus estimates cited by Seeking Alpha project revenue of $90.71 billion and earnings per share of $4.72. In the same quarter a year earlier, the company reported revenue of $77.67 billion and earnings per share of $4.12.
The results will give investors a chance to assess cloud demand, enterprise AI adoption and the financial impact of Microsoft's investments. The positive analyst revisions come as other AI-linked stocks face pressure over borrowing costs and the scale of spending required to build infrastructure.
Microsoft has so far retained analyst support, with firms pointing to its established cloud and productivity businesses as reasons for optimism. However, the upcoming results will be important in determining whether operating performance continues to justify the higher growth expectations reflected in the stock's recent rally.
This article is for informational purposes only and does not constitute financial advice.
