After experiencing one of the weakest corrections among the “Magnificent Seven” at the start of 2026, Microsoft shares are gradually returning to an upward trend. The stock has rebounded from recent lows, supported by strong earnings, improving Azure performance, and easing concerns over AI monetization.
Over the past month, the market has begun reassessing the scale of the decline: despite pressure from record data center investments, investors are once again betting on Microsoft as one of the key infrastructure beneficiaries of the AI cycle.
Azure returns as the main bullish driver
The latest quarterly results became the key catalyst for the recovery. Azure accelerated its growth to 40%, exceeding market expectations, while Microsoft’s overall AI business reached an annual run rate of over $37 billion. Management emphasized that demand for computing capacity still exceeds supply, reducing the risk of a sharp slowdown in the cloud segment. Another positive signal came from the active commercialization of Copilot, as enterprise adoption of AI services continues to grow faster than analysts had forecast.
The market is becoming more comfortable with AI spending
Just a few months ago, investor concerns around capital expenditures were the main source of pressure on MSFT. There were fears that the company was investing too aggressively in infrastructure without generating proportional returns. Sentiment is now shifting: strong Azure performance and resilient corporate demand are gradually validating management’s investment thesis. Analysts are increasingly viewing current spending not as a threat to margins, but as a strategic move to secure a dominant position in the next technological cycle.
The next growth phase is not limited to OpenAI
The market is also focusing on Microsoft’s evolving AI partnership architecture. Following revisions to its relationship with OpenAI, the company is actively expanding ties with Anthropic and other model developers. For Azure, this creates an additional source of demand and reduces reliance on a single partner. Against this backdrop, some analysts now view the recent correction as a repricing phase rather than the start of a structural downturn. The consensus remains positive: if Azure maintains its current growth rate and Copilot continues gaining enterprise traction, the recovery in the stock could extend into the second half of the year.
Near-term outlook
Another rebound from support around the $412 level and a return toward resistance near $430 increase the likelihood of a breakout and further recovery toward $440–450. Failure by the bulls to break through resistance, as noted in the article Microsoft under pressure as market demands returns on AI investments, could trigger another wave of selling.
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