Microsoft Stock Outlook 2026: Experts Say Shares Still Undervalued
- Wedbush analysts say Microsoft stock has significant room to run in 2026, even after pulling back from October’s record highs.
- Investors are still “underestimating” the growth potential of Microsoft’s Azure cloud services, which could add substantial value as the AI industry expands.
Key Takeaways
Microsoft Stock 2026: Analysts See 30% Upside as Azure & AI Drive $25B Growth
Microsoft (MSFT) has already set multiple records this year, and analysts believe the momentum can continue well into 2026. Wedbush, led by Dan Ives, reiterated its “outperform” rating with a $625 price target nearly 30% higher than current levels.
Analysts argue that investors are still underestimating the growth potential of Microsoft’s Azure cloud platform and Copilot AI assistant. Together, these could add $25 billion in sales through fiscal 2026, positioning Microsoft as a foundational player in the next stage of AI-driven expansion.
Even with the recent pullback in tech stocks, analysts remain confident that the AI trade will continue driving growth into 2026. The largest technology companies are investing tens of billions of dollars into AI infrastructure, reinforcing expectations that the sector will remain a powerful engine for returns. For investors, this means opportunities tied to cloud computing, AI platforms, and companies positioned at the center of this spending wave.
Microsoft Stock 2026: Analysts Target $635 as AI Role Strengthens Growth Outlook
Wedbush analysts believe Microsoft is positioned for a “massive 2026,” calling the stock a compelling buy as it plays a foundational role in the next stages of AI development. Their $625 price target suggests nearly 30% upside from current levels.
They’re not alone Visible Alpha data shows that 12 of 13 analysts currently rate Microsoft a “buy,” with just one holding a “hold” rating. The average price target among them is $635, even higher than Wedbush’s forecast, underscoring expectations that Microsoft’s stock will continue climbing beyond the records set earlier this year.
Microsoft Stock 2025: AI Trade Volatility Keeps Shares 10% Below Record Highs
The AI trade has faced turbulence in recent weeks, with investors questioning whether the circular funding model in the industry is sustainable and when tech giants will see returns on their massive investments.
Microsoft shares reflected this uncertainty, holding little changed in late-afternoon trading Monday. Despite gaining about 15% since the start of the year, the stock remains roughly 10% below its most recent record closing high, set just before October’s earnings report.
The Bottom Line
Despite recent volatility in tech stocks, analysts see Microsoft as undervalued heading into 2026. With Azure cloud and Copilot AI projected to add $25 billion in sales, and consensus price targets around $635, the company is positioned to play a foundational role in the next stage of AI development. For investors, that means Microsoft remains one of the most compelling opportunities in the AI trade, even after its record-setting year.
