Weekly forecast: Microsoft stock targets $522 as cloud, AI drive growth
Microsoft (MSFT) shares ended the week at $510, gaining over 2% in seven days. The stock is trading in an upward channel. This month, MSFT nearly reached a new all-time high (ATH) just under $515 and now aims for the $522 level, assuming growth momentum holds.
Since May, Microsoft stock has surged by an impressive 30%, driven by strong results from the quarter ending March 2025. Revenue rose 13% year-over-year (compared to 12% the previous quarter), while operating income grew even faster at 16%.
A key growth driver was a 21% increase in revenue in Microsoft’s Intelligent Cloud segment, which includes the Azure cloud computing division. The cloud infrastructure and software sub-segment reported a 33% jump in revenue.
Other business units also performed well. Productivity and Business Processes revenue rose 10% YoY, boosted by rising Microsoft 365 subscriptions.
“Cloud and AI are the most strategic resources for every organization — helping scale, reduce costs, and accelerate growth,” said CEO Satya Nadella in the quarterly report.
Is MSFT stock growing too fast?
However, some investors, as noted by Motley Fool, are questioning whether Microsoft’s stock is becoming overvalued. One concern is the slow adoption of the Copilot AI assistant, which is struggling to compete with ChatGPT.
MSFT daily chart. Source: TradingView
While ChatGPT recently surpassed 900 million downloads, Microsoft’s Copilot app for smartphones has only reached 79 million downloads, according to Sensor Tower.
According to Bloomberg, much of Microsoft’s stock rally this year has been fueled by Wall Street’s AI expectations. In May, CEO Satya Nadella reiterated the goal of bringing “hundreds of millions” of users to Microsoft’s AI-based product suite.
Microsoft is focused on three Copilot products: a developer assistant, a productivity tool integrated into Outlook and Word, and a personal assistant. However, the rollout of Copilot for Windows has been delayed due to internal concerns about disrupting user habits — a decision that is testing some investors’ patience.
If MSFT fails to break ATH this week, a pullback to $500 is likely. Further support lies at the 20-day SMA ($498) and 50-day SMA ($475).
As we wrote, Microsoft stock price eyes $525 breakout as AI dominance pushes valuation toward $4T
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