Weekly forecast: Microsoft expected to test $515 next week
Microsoft stock rebounds 27% since April low, beats EPS expectations
Microsoft continues to prove its dominance in the AI and cloud computing sectors, with third-quarter results reflecting strong growth in key business segments.
The Intelligent Cloud division posted $26.8 billion in revenue, up 21% year-over-year, with Azure and related services rising by 35%. AI-related workloads now account for nearly half of that growth, highlighting the company’s early-mover advantage in generative AI. Microsoft’s total cloud revenue soared to $42.4 billion, marking a 20% increase that confirms enterprise demand is accelerating.
The Microsoft 365 Copilot, now used by over 70% of Fortune 500 companies, has played a major role in driving productivity gains and subscription growth. This success aligns with market forecasts that the AI sector will grow at a 37% compound annual rate through 2030. Strategic partnerships, including joint multi-cloud deployments with Oracle, further enhance Microsoft’s ability to compete against AWS and expand its enterprise footprint.
Wall Street raises targets as stock rebounds
Despite gaining only 5.41% over the past year, Microsoft’s stock has climbed nearly 27% since its April 8 low, riding renewed investor optimism. The company’s recent EPS beat of $3.46 versus expectations of $3.20 marked the 15th outperformance in 16 quarters, reinforcing confidence in its growth trajectory. Citigroup raised its price target to $540 on May 15, while overall analyst sentiment remains strongly bullish: 30 out of 35 analysts rate MSFT a “Buy,” with a median price target of $510.
MSFT stocks chart. Source: TradingView
Institutional investors continue to hold firm, with major firms like Vanguard, BlackRock, and State Street owning over 1.57 billion shares. Analyst price targets now stretch from $475 to as high as $600, setting the stage for Microsoft to potentially reach a $4 trillion valuation. Surveys show that over 80% of chief information officers plan to increase spending on Azure—an all-time high—further validating long-term demand for its cloud platform.
Risks remain, but Microsoft’s war chest and innovation engine lead the way
Microsoft’s $80 billion in cash reserves gives it unmatched flexibility to invest in infrastructure and R&D, a major advantage amid intensifying competition and potential geopolitical trade risks. Over half of this capital is committed to expanding cloud and AI operations, mainly within the United States. Though tariffs and macroeconomic uncertainty present headwinds, Microsoft’s diversified portfolio and sticky enterprise client base offer insulation against volatility.
Concerns about valuation persist, especially with shares hovering near $505, but most analysts see upside potential fueled by continued AI integration, data center growth, and ecosystem stickiness. For long-term investors, Microsoft remains a core holding, driven by structural tailwinds in AI adoption and global digital transformation. With a consistent earnings beat record and growing institutional interest, Microsoft’s fundamentals appear as solid as its ambitions.
Next-week forecast for MSFT stock
Looking ahead to next week, Microsoft (MSFT) stock is likely to maintain its bullish trend, supported by strong AI momentum and favorable earnings performance. Analysts expect continued investor interest, especially with growing enterprise spending on Azure and anticipated announcements around Copilot integration at Microsoft Inspire. Short-term resistance is near $510, with support at $490. If broader market conditions remain stable, MSFT could test the $515 level, with high-volume buying expected on any dip below $500. Barring macroeconomic shocks, Microsoft’s robust fundamentals suggest a moderately bullish outlook for the week of July 15–19.
Recently we wrote that Microsoft stock has continued its impressive upward march this week, extending gains both on a weekly and monthly basis.
