Microsoft Price Prediction: Can MSFT Extend Its AI Rally After Azure Crosses $100 Billion?

Microsoft Price Prediction: Can MSFT Extend Its AI Rally After Azure Crosses $100 Billion?

Microsoft surged nearly 9% after reporting stronger-than-expected fiscal fourth-quarter earnings, sending the stock back above $425 and reigniting optimism around its AI strategy. The software giant not only beat Wall Street estimates but also revealed that Azure generated more than $100 billion in annual revenue for the first time, underscoring the scale of its cloud business.

The earnings report marks a sharp shift in sentiment for Microsoft, which had been down roughly 19% year to date before the results. Investors are now watching whether accelerating cloud growth, rising Copilot adoption, and disciplined AI spending can support a broader recovery through the rest of the year.

Azure Crosses $100 Billion as Microsoft Beats Expectations

Microsoft reported fiscal Q4 2026 revenue of $90 billion, up 18% year over year and ahead of analyst estimates of $87.62 billion. Diluted earnings per share came in at $4.81, representing 32% annual growth, or $4.74 excluding a gain related to the company's OpenAI investment.

Azure once again led the quarter. Growth accelerated to 43%, up from 40% in the previous quarter, while annual Azure revenue surpassed the $100 billion milestone for the first time. Microsoft Cloud revenue climbed 27% to $59.3 billion, and commercial remaining performance obligations jumped 84% to $678 billion, reflecting continued enterprise demand for cloud services.

Source: Visible Alpha

The company also highlighted growing adoption of its AI products, revealing that more than 30 million customers now pay for Copilot. Meanwhile, capital expenditures, including leases, totaled $41 billion, below the roughly $42 billion analysts had expected. CFO Amy Hood said Microsoft expects AI investment to continue increasing in fiscal 2027 while remaining free cash flow positive.

The strong quarter prompted several analysts to raise their price targets. Citi lifted its target to $600, Wells Fargo raised its forecast to $650, Bernstein maintained a $647 target, and Piper Sandler increased its estimate to $550. Barclays was the only notable outlier, trimming its target to $512 while maintaining an Overweight rating.

Microsoft's disciplined approach to AI spending also contrasted with Alphabet's recent earnings, where higher capital expenditure guidance weighed on Google's share price. Investors appear increasingly willing to reward companies that can expand AI infrastructure without sacrificing profitability.

Microsoft Stock Reclaims Momentum

The earnings rally has significantly improved Microsoft's near-term outlook, with the stock reclaiming the $425 area after spending much of 2026 under pressure. Although shares remain below their 52-week high of $551.05, the latest results suggest investors are becoming more confident that Microsoft's AI investments are translating into sustainable revenue growth rather than simply driving higher costs.

The market has also responded positively to Microsoft's balanced capital allocation. While management reaffirmed that AI infrastructure spending will continue rising, the lower-than-expected capex figure reassured investors that the company remains focused on generating strong cash flow alongside aggressive expansion.

Analyst sentiment remains overwhelmingly positive. Of the 57 analysts covering Microsoft, 54 rate the stock either a Strong Buy or Buy, highlighting continued confidence in Microsoft's leadership across cloud computing and artificial intelligence. Attention will now shift to Amazon's earnings, where AWS growth is expected to be compared directly with Azure's accelerating 43% expansion.

CoinCodex’s 1-Year Microsoft Price Prediction

According to the latest CoinCodex Microsoft price prediction, MSFT could enter a period of consolidation after its earnings-driven rally before resuming a stronger uptrend in 2027.

The forecast suggests the stock may soften through the remainder of 2026, with average prices easing from around $394 in August to the low $330 range during October and November. Rather than signaling a long-term reversal, the model points to a cooling-off period as investors digest recent gains and broader market conditions remain uncertain.

Momentum is projected to improve during the first quarter of 2027. Average prices recover into the mid-$360s and low-$370s in February and March before moving back above $400 in April.

The strongest part of the forecast comes during the second quarter of 2027. CoinCodex projects Microsoft climbing steadily through May and June, with July prices reaching roughly $460 to $496. If Azure continues delivering robust growth and Copilot adoption expands further, those projections suggest Microsoft's longer-term AI story could remain intact despite any near-term volatility.