Microsoft's AI Dominance Drives Stock Surge and Analyst Optimism

Wells Fargo hikes Microsoft price target, says AI business could reach $100 billion in revenue

It's still early days for Microsoft's artificial intelligence business, according to Wells Fargo. The bank reiterated its overweight rating on the technology giant and raised its price target to $585 from $565. This updated forecast is approximately 19% higher than where shares closed on Tuesday. "We still see a bright future ahead for Microsoft, driven by continued growth prospects in huge categories of IT spend, ability to further monetize strong positioning in multiple end markets, and a financial profile that continues to exhibit durable margin expansion," wrote Wells Fargo analyst Michael Turrin. "We acknowledge shares are trading near historical highs, but think this is justified given its early AI lead and strong incumbent position in a tight market, esp. favorable in the current environment." MSFT YTD mountain MSFT year to date In his upside case, Turrin believes that Microsoft's artificial intelligence business could reach $100 billion in revenue by fiscal year 2029. Microsoft has already demonstrated a history of success in this aspect by scaling its AI business to $13 billion in annual recurring revenue in less than three years, making it its "fastest product ramp ever." Turrin also expects a growing emphasis ahead on Copilot, Microsoft's AI assistant. In particular, he expects the application to reach critical mass by next year and over time bring in $12 billion in annual recurring revenue. "Across the Microsoft 365 Commercial Cloud business we assume a total addressable population of 430M users between all user tiers," the analyst wrote. "From this, we note that MSFT would only need to achieve ~10% adoption rate to reach the $10B annualized revenue run-rate mark, which also assumes an average ~20% discount." Microsoft stock has rallied 16% in 2025. Most analysts are bullish on Microsoft. LSEG data shows 55 of the 62 who cover the stock rate it a buy or strong buy.

Wedbush raises Microsoft's stock price target to $600

For Microsoft, the age of AI isn't coming -- it's already knocking on the data center door, demanding compute, contracts, and cloud-scale monetization. And Wall Street is starting to answer. On Wednesday, Wedbush Securities analysts hiked their price target on Microsoft stock from $515 to $600, citing the dawn of a "massive adoption wave" for the tech giant's offerings -- namely Copilot and Azure -- that's poised to hit in force by fiscal 2026. The AI hype cycle is starting to give way to actual deployment, and Wedbush analysts led by Dan Ives say the reality is finally taking shape on the ground: Customer demand is accelerating, deal conversion is speeding up, and companies across industries are starting to roll out AI use cases at scale. In an analyst note on Wednesday, Ives called this Microsoft's "shining moment," saying AI is about to reshape the company's growth trajectory in a way that Wall Street still doesn't fully appreciate. Microsoft's stock is up almost 7% this month -- it hit a record high on June 5 as Wall Street continues to price in a future where the company leads the AI pack -- and 17% year to date. Wedbush's field checks -- including conversations with Microsoft partners and customers -- suggest that the next three years could bring Copilot and Microsoft's AI tools to more than 70% of the company's installed base. That level of penetration would mark a turning point for Microsoft's enterprise footprint and AI monetization across the board. (Microsoft is one of the 30 companies in Ives' recently launched ETF that tracks AI stocks.) Much of that optimism is pinned to Azure, Microsoft's $80 billion cloud empire, which is increasingly doubling as the company's AI engine. Wedbush now estimates that for every $100 a company spends on Azure, it's spending an additional $50 on AI tools layered into the cloud stack -- up from $40. If the trend continues, Ives believes that AI alone could add $25 billion to Microsoft's top line by fiscal 2026. He wrote that Microsoft is the "clear front runner on the enterprise hyper scale AI front, despite increasing competition from Amazon/AWS and Google/GCP. The core driver of the impressive Azure value proposition and MSFT next gen enterprise stack is AI....and this dynamic is just starting to take shape in the field in our view." This isn't just a product shift -- it's a strategic realignment. Microsoft is all-in on "agentic AI," autonomous systems that are capable of multistep planning, memory, and decision-making. Tools such as Copilot Studio and Azure AI Foundry are positioning the company as a developer-first enabler of intelligent agents at scale. Copilot is playing a central role in Microsoft's story. Once viewed as a flashy productivity add-on, it's becoming a central part of the company's enterprise pitch. Embedded across Office, Azure, and other services, Copilot now spans everything from inbox management to code generation, and early adopters are increasingly becoming evangelists. The pace of deployment, according to Ives, is picking up across industries, with government, finance, and retail among the most aggressive movers. Much of the enthusiasm stems from what Wedbush called the "true inflection year" of AI growth in 2026, when enterprise budgets shift from experimentation to execution. Chief information officers who spent 2024 and 2025 laying the groundwork for AI integration -- through proof-of-concepts and sandboxed tests -- are now moving toward broader rollouts. And that's changing the financial story for Microsoft. Wedbush estimated that Copilot alone could generate an additional $25 billion in revenue by fiscal 2026. Behind the scenes, Microsoft is spending heavily to keep up. Its AI-fueled cloud ambitions come with real costs -- namely, a projected $80 billion in capital expenditures for fiscal 2025, as it builds out data centers and infrastructure to meet demand. But to Wedbush, that's good news. The firm said Microsoft is establishing a "strong competitive cloud edge" advantage over rivals Amazon and "especially" Google, particularly in high-stakes enterprise "bake-offs" where trust, integration, and support matter as much as raw performance -- Ives cited Microsoft's stronger enterprise relationships, faster monetization, and more integrated platform. Ives said Wall Street still hasn't quite caught up to the full implications of Microsoft's AI bet. Despite its trillion-dollar market cap and continued gains in Azure market share, the stock hasn't fully priced in what Wedbush sees as the next leg of AI-driven growth. "We believe the stock still has yet to price in what we view as the next wave of cloud and AI growth coming to the Redmond story," Ives wrote of the Redmond, Washington-based company. "It has become crystal clear to us that the monetization opportunities around deploying AI in the cloud is a transformational opportunity across the industry with Redmond in the drivers seat." Microsoft may have started as a productivity company, but it has evolved into a cloud platform, and it now stands as the enterprise AI backbone. For investors, that evolution looks increasingly like a revolution. In other words: The AI boom may just be beginning. And Microsoft, long known for its ability to quietly ride structural tech shifts, is about to get a lot louder -- and in the AI era, it's about to start speaking in billions.

Microsoft Is 'Playing Chess, And Others Are Playing Checkers:' Dan Ives Says MSFT Could Be A $5 Trillion Company In 18 Months - Microsoft (NASDAQ:MSFT), Invesco QQQ Trust, Series 1 (NASDAQ:QQQ)

Tech bull Daniel Ives has predicted that Microsoft Corp. MSFT is on the path to becoming a $5 trillion company in the next 18 months after he raised the stock's price target to $600 apiece. What Happened: After bumping his price target on MSFT, citing a "massive adoption wave" of artificial intelligence-driven Azure services, on Wednesday, Dan Ives told CNBC that he expects Microsoft to become a $5 trillion company over the next 18 months. "We are trying to understand the trajectory of the AI stack, commercial cloud, which is trending anywhere from 5% to 7% ahead of expectations, and I think the most important thing is, this could be an incremental $25 billion that the street is not factoring into next year's number," he said. Adding, "That's why I believe, not just $4 trillion, potentially, we are looking at a $5 trillion market cap in the next 18 months." He also hailed MSFT's Chairman and CEO, Satya Nadella, saying that "if you look at what Nadella is doing, Nadella understands the cloud side better than any of the competitors." "I think what's happened now, as we go into the software phase of AI, is that's where Nadella and Redmond are playing chess, and others are playing checkers," Ives said. See Also: Microsoft Stock Poised For 23% Rally As AI Monetization Gains Steam, Dan Ives Says Why It Matters: Ives said that his price target bump to $600 apiece was "conservative," as the timeline was just for 18 months. Ives explained that for every $100 that an MSFT customer spends, there is an incremental $50 of AI spend on the table. "So, essentially, what you're creating is almost another sort of mini Microsoft within Redmond. And I think no one understands what's happening better than Jensen Huang from Nvidia," he said. Price Action: MSFT shares were up 0.047% in after-hours on Wednesday and ended 0.44% higher at $492.27 apiece. It has risen by 17.60% on a year-to-date basis and 8.87% over the past year. Benzinga Edge Stock Rankings shows that MSFT had a stronger price trend over the short, medium, and long term. Its momentum ranking was solid; however, its value ranking was poor at the 13.32nd percentile. The details of other metrics are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Wednesday. The SPY was up 0.056% at $607.12, while the QQQ rose 0.26% to $541.16, according to Benzinga Pro data. Read Next: BlackRock Bets Big On Defense Companies Amid Escalating Geopolitical Tensions: Palantir, Lockheed Martin, Northrop Grumman Among Stocks In Focus Photo courtesy: Tada Images / Shutterstock.coma MSFTMicrosoft Corp$492.500.49%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum68.75Growth50.76Quality34.88Value13.32Price TrendShortMediumLongOverviewQQQInvesco QQQ Trust, Series 1$541.130.25%SPYSPDR S&P 500$607.090.05%Market News and Data brought to you by Benzinga APIs

Amazon, Google Not Far Behind, But Dan Ives Says Microsoft 'Clearly Leading' In These Segments -- $600 Price Target Is 'Probably' Conservative - Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN)

On Thursday, Wedbush analyst Dan Ives said that Microsoft Corporation MSFT is outpacing competitors like Amazon.com, Inc. AMZN and Alphabet Inc.'s GOOG GOOGL Google in the cloud and hyperscaling sectors. What Happened: Ives, who has become more bullish on Microsoft, has raised his price target for the stock to $600, citing the company's dominant position in cloud computing and hyperscaling technologies. "Microsoft is clearly leading when it comes to hyperscaling and cloud," Ives said during an interview with The Street. While Amazon's AWS and Google Cloud have made strides, Ives said that Microsoft's Azure platform has a significant edge, making it a crucial part of the company's success. He also noted that only 20% of Microsoft's business is currently focused on next-gen cloud and AI, and as this grows to 50-60%, it will fundamentally revalue the company. "$600 [price target]... I ultimately think its probably conservative," Ives added. See Also: Mark Zuckerberg's Meta Dangled '$100 Million Signing Bonuses' To OpenAI Team Members, Says Sam Altman: Happy 'None' Of Our Best People Took Them Why It's Important: Microsoft currently has a market cap of $3.69 trillion, making it the second most valuable company in the world after Nvidia Corporation NVDA. Ives has also predicted that Microsoft could reach a $5 trillion valuation within the next 18 months, following his decision to raise the stock's price target to $600 per share. Microsoft currently holds a consensus price target of $523.73, derived from assessments by 29 analysts. The three latest analyst updates came from Morgan Stanley, Wedbush and Wells Fargo, providing an average price target of $571.67 and suggesting a potential 14.98% upside. Price Action: Microsoft (MSFT) shares rose 1.05% during Thursday's regular session, followed by a marginal decline of 0.050% in after-hours trading, according to Benzinga Pro. The stock is up 18.84% year-to-date and has gained 10.02% over the past 12 months. Benzinga Edge Stock Rankings indicate that MSFT has demonstrated a strong price trend across short, medium and long-term periods. While its momentum ranking remains robust, its value ranking is relatively weak. Additional metric details can be found here. Photo Courtesy: katuSka on Shutterstock.com Read Next: Cathie Wood Dumps Palantir As Stock Touches Peak Prices, Bails On Soaring Flying-Taxi Maker Archer Aviation Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AMZNAmazon.com Inc$218.182.92%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum44.22Growth97.08Quality65.27Value49.86Price TrendShortMediumLongOverviewGOOGAlphabet Inc$174.201.58%GOOGLAlphabet Inc$173.401.59%MSFTMicrosoft Corp$497.201.00%NVDANVIDIA Corp$155.350.67%Market News and Data brought to you by Benzinga APIs

Microsoft Stock Could Soar 44% On AI Boom, Analyst Says -- But There's A Catch - Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN)

Microsoft Corp. MSFT continues to solidify its position as a frontrunner in monetizing artificial intelligence (AI), driving substantial gains for investors, explains Nigam Arora as he raises his price target on the Windows maker. What Happened: According to a recent note from the Arora Report, Microsoft, currently trading at $494.24, has seen an astounding 1403% gain since the company's original long position on the stock at $32.88. Microsoft's strategic initiatives, including the integration of Copilot into Office, Dynamics, and Teams, are significantly deepening subscription revenues, explains Arora. The rollout of Copilot Plus PCs is further set to boost on-device AI capabilities, expanding the company's reach. Azure, Microsoft's cloud computing arm, remains a compelling growth driver, exhibiting double-digit growth that is currently outstripping competitors and maintaining healthy margins. The recent breakout in MSFT's stock technicals further reinforces this positive momentum. Despite certain risks, the commentary points to a strong conviction in Microsoft's continued upward trajectory. The Arora Report has raised its target zone for MSFT to an ambitious $713 - $726, suggesting an expected gain of approximately 44% from current levels. For new investors, the report advises a cautious approach, recommending limiting initial positions and planning to scale up if the stock experiences a dip. Existing holders are encouraged to maintain their positions, capitalizing on Microsoft's leading role in the AI revolution. See Also: Microsoft Is 'Playing Chess, And Others Are Playing Checkers:' Dan Ives Says MSFT Could Be A $5 Trillion Company In 18 Months Why It Matters: However, the Arora Report's comprehensive 360-degree analysis also highlights crucial risks. The intensifying competition in the cloud computing space from Amazon.com Inc.'s AMZN AWS and Alphabet Inc.'s GOOG GOOGL subsidiary Google's Cloud platform presents a notable challenge. Furthermore, potential supply constraints on advanced chips, vital for AI infrastructure, could impede growth. The increasing scrutiny and tightened regulation of cloud platforms and AI technologies also pose regulatory hurdles that Microsoft must navigate. Price Action: MSFT shares ended 0.30% lower at $495.94 apiece on Friday. It has risen by 18.48% on a year-to-date basis and 8.58% over the past year. Benzinga Edge Stock Rankings shows that MSFT had a stronger price trend over the short, medium, and long term. Its momentum ranking was solid; however, its value ranking was poor at the 13.24th percentile. The details of other metrics are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, ended higher on Friday. The SPY was up 0.50% at $614.91, while the QQQ advanced 0.34% to $548.09, according to Benzinga Pro data. After hitting a fresh record on Friday, the futures of the S&P 500, Nasdaq 100, and Dow Jones indices were trading higher on Monday. Read Next: Microsoft Stock Poised For 23% Rally As AI Monetization Gains Steam, Dan Ives Says Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Tada Images / Shutterstock.coma AMZNAmazon.com Inc$224.590.58%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum62.45Growth97.01Quality68.97Value49.62Price TrendShortMediumLongOverviewGOOGAlphabet Inc$180.631.32%GOOGLAlphabet Inc$180.371.03%MSFTMicrosoft Corp$497.900.40%QQQInvesco QQQ Trust, Series 1$551.210.57%SPYSPDR S&P 500$617.280.39%Market News and Data brought to you by Benzinga APIs

Microsoft Stock Poised For 23% Rally As AI Monetization Gains Steam, Dan Ives Says - Microsoft (NASDAQ:MSFT), NVIDIA (NASDAQ:NVDA)

Reflecting the surging tide of artificial intelligence, Wedbush Securities analyst Dan Ives has raised his price target for Microsoft Corp. MSFT to $600, up from an earlier estimate of $425, citing a "massive adoption wave" of AI-driven Azure services. What Happened: The announcement, made via X, underscores Ives' confidence in Microsoft's pivotal role in the AI revolution, dubbing it the company's "shining moment." The new target implies a 23% upside for Microsoft investors based on Tuesday's closing price. Ives, a veteran tech bull on Wall Street, bases his bullish outlook on recent field checks revealing robust AI customer adoption. Microsoft's Azure cloud platform, enhanced by innovations like Nvidia Corp.'s NVDA Hopper GPUs and custom-built silicon, is at the forefront, with monetization strategies outlined in the Azure API Management framework driving significant growth. The new target, approximately 25% premium over the current Wall Street consensus of $517.85, reflects Ives' belief that AI infrastructure is propelling Microsoft ahead of competitors. See Also: BlackRock Bets Big On Defense Companies Amid Escalating Geopolitical Tensions: Palantir, Lockheed Martin, Northrop Grumman Among Stocks In Focus Why It Matters: Currently, based on the 29 analysts tracked by Benzinga, MSFT has a consensus target price of $517.85 apiece, with a 'buy' rating. The targets range from $475 to $605. Recent price targets from Wells Fargo, Citigroup, and RBC Capital imply a 15.07% upside for Microsoft Corp. MSFT shares were up 0.22% in premarket on Wednesday and ended 0.85% higher at $490.11 apiece on Tuesday. It has risen by 17.09% on a year-to-date basis and 8.68% over the past year. Benzinga Edge Stock Rankings shows that MSFT had a stronger price trend over the short, medium, and long term. Its momentum ranking was solid; however, its value ranking was poor at the 13.32nd percentile. The details of other metrics are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Wednesday. The SPY was down 0.054% at $607.11, while the QQQ rose 0.16% to $540.66, according to Benzinga Pro data. Read Next: Michael Saylor Offers BTC Credit Model As Bill Pulte Pushes Crypto For Fannie Mae, Freddie Mac: Could Bitcoin Soon Count Toward Mortgage Qualification? Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock MSFTMicrosoft Corp$491.630.31%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum68.75Growth50.76Quality34.88Value13.32Price TrendShortMediumLongOverviewNVDANVIDIA Corp$149.150.85%QQQInvesco QQQ Trust, Series 1$541.080.24%SPYSPDR S&P 500$607.200.07%Market News and Data brought to you by Benzinga APIs

Microsoft's AI And Cloud Scale Drives Market-Beating Returns - Microsoft (NASDAQ:MSFT)

Microsoft Corp. MSFT has demonstrated significant strength, with its stock surging over 31% in the last three months, a performance that notably outpaces both the S&P 500 Index's approximately 11% gain and the NASDAQ Composite Index's roughly 16% gain. This momentum is primarily attributed to Microsoft's commanding presence in cloud computing, particularly through its Azure platform, and its leading position in the rapidly evolving field of Artificial Intelligence (AI). The company's strategic integration of AI across its product offerings and its robust financial performance have been key drivers of this growth. Also Read: Microsoft's Next-Gen AI Chip Still Lags Nvidia's Blackwell, Postpones Launch Robust Financial Performance Fuels Market Surge As of recent trading, MSFT is positioned close to its 52-week high of $501, having reached $500.76 on June 30, 2025, which underscores strong investor confidence. Year to date, Microsoft has gained 12.44% in 2025. In April, Microsoft reported third-quarter revenue of $70.07 billion, up 13% year-over-year. The revenue total beat a Street consensus estimate of $68.43 billion. Total Microsoft Cloud revenue was $42.4 billion in the quarter, up 20% Y/Y. Furthermore, revenue specifically from Azure and other cloud services saw a substantial 33% year-over-year increase, highlighting robust demand for its cloud offerings. The company also surpassed earnings expectations, reporting quarterly earnings per share of $3.46, which beat the Street's consensus estimate of $3.22. Analysts Project Continued AI-Driven Growth Analysts are overwhelmingly optimistic about Microsoft's future trajectory. Derrick Wood of TD Cowen notes that Microsoft is well-positioned in crucial secular growth markets, while Brad Sills of Bank of America hails it as the singular AI leader in both applications and infrastructure. The consensus price forecast from 29 analysts stands at $523.73, with Citigroup issuing a high forecast of $605 on June 11, 2025. An average price forecast of $571.67 from Morgan Stanley, Wedbush, and Wells Fargo suggests a potential 14.94% upside for Microsoft based on these recent analyst ratings. Goldman Sachs analyst Kash Rangan, who referred to Microsoft as the "AI ringleader," projects that Microsoft Cloud revenue will exceed $300 billion by fiscal 2029, a significant leap from its current figure of under $140 billion. Rangan believes that Microsoft's tiered AI pricing strategy, exemplified by products like Copilot and Dynamics AI, will be instrumental in boosting both growth and profit margins. Dan Ives of Wedbush anticipates Microsoft achieving a $4 trillion market capitalization this summer, driven by its profound investments in AI infrastructure and innovation. He views Microsoft as a foundational player in the AI revolution, alongside Nvidia Corp. NVDA, contributing to the broader tech bull market, and projects a potential $5 trillion valuation within the next 18 months due to accelerating AI demand. Evolving Relationship With OpenAI Presents New Dynamics The relationship between Microsoft and OpenAI, while initially highly beneficial, is currently undergoing renegotiation. While Microsoft has significantly benefited from OpenAI's AI advancements, particularly in areas like Azure and Copilot, OpenAI is now seeking greater independence. Internal projections suggest that OpenAI plans to reduce Microsoft's revenue share from 20% to 10% by 2030. This development comes as OpenAI recently announced that its annualized revenue run rate has doubled to $10 billion, excluding Microsoft licensing and one-time deals. Price Action: MSFT stock is trading higher by 0.03% to $497.56 at last check Tuesday. Read Next: Taiwan Semiconductor's Affiliate Fast-Tracks Singapore Plant Spurred By Geopolitics Photo by katuSka via Shutterstock MSFTMicrosoft Corp$493.26-0.83%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum70.76Growth49.89Quality33.97Value13.21Price TrendShortMediumLongOverviewNVDANVIDIA Corp$154.57-2.16%Market News and Data brought to you by Benzinga APIs