Shares of Microsoft (NASDAQ:MSFT) are trading just below their all-time high of $480.69, reached on June 16. As one of the world’s most valuable companies, Microsoft continues to outperform thanks to strong demand for its cloud computing and artificial intelligence (AI) services. With analysts projecting further upside, the Microsoft stock forecast remains positive despite the recent surge.
Microsoft Delivers Robust Earnings Amid AI Boom
In its latest earnings report, Microsoft posted revenue of $70.1 billion, up 13% year over year, and earnings per share of $3.46, an 18% increase. The performance exceeded Wall Street expectations and reaffirmed the company’s leadership in AI and cloud.
The Intelligent Cloud division, which includes Azure, generated $26.8 billion in revenue—up 21%. Azure itself grew 33%, reflecting rapid enterprise adoption of AI solutions. With more companies integrating AI into operations, Microsoft’s early investment in AI infrastructure is clearly paying off.
CEO Satya Nadella’s focus on embedding AI into Microsoft’s entire product suite—from Azure to Microsoft 365—is helping the company deepen customer relationships and unlock new revenue streams.
Cloud and Productivity Power Microsoft’s Future
The Microsoft stock forecast is strongly tied to the company’s ongoing momentum in cloud computing. Cloud revenue now accounts for $42.4 billion of total sales, rising 20% year over year. Microsoft’s deep bench of AI tools, paired with its global network of data centers, gives it a competitive edge in a crowded cloud market.
Meanwhile, the Productivity and Business Processes segment delivered $29.9 billion in revenue, up 10%. Microsoft 365 remains a cornerstone of growth, with strong adoption among both businesses and consumers. Enterprise subscriptions to premium offerings like M365 Copilot are growing, while consumer subscriptions increased 9% to 87.7 million.
LinkedIn and Dynamics 365, Microsoft’s business software division, also added to growth—up 7% and 16%, respectively. These trends reinforce Microsoft’s diversification beyond traditional software and its strength across verticals.
Even Weak Spots Are Showing Strength
Even Microsoft’s historically slower-growing division, More Personal Computing, posted solid results. Revenue rose 6% to $13.4 billion, supported by stability in Windows and strong performance in gaming and advertising.
Xbox content and services increased 8%, thanks to first-party game titles, while advertising revenue from Bing and Edge jumped 21%. These gains reflect Microsoft’s expanding presence in digital advertising and gaming, two growth areas it’s quietly cultivating.
Microsoft Stock Forecast Points to More Gains
Looking ahead, Microsoft expects Intelligent Cloud revenue to reach $28.75–$29.05 billion in the current quarter. Azure growth remains strong, though demand continues to outpace available capacity in some regions.
For More Personal Computing, the company guides for $12.35–$12.85 billion in revenue. Advertising is expected to grow in the high teens, and Xbox is projected to deliver high-single-digit growth—both signs of continued momentum.
Notably, Microsoft’s commercial remaining performance obligations grew 34% to $315 billion, with 40% expected to convert to revenue in the next 12 months. This backlog provides strong visibility and underpins the bullish Microsoft stock forecast.
Shareholder Returns and Analyst Sentiment
Microsoft returned $9.7 billion to shareholders last quarter through dividends and buybacks—a 15% increase from the prior year. With strong free cash flow and durable demand across segments, the company is well-positioned to continue returning capital.
Wall Street analysts are aligned in their optimism. The average 12-month price target for Microsoft is $519.21, with the highest estimate at $626—implying up to 32% upside from current levels.
Bottom Line: Microsoft Stock Still a Buy?
Microsoft’s dominant position in AI, cloud, productivity software, and gaming makes it a compelling long-term investment. The company’s innovation engine and broad product portfolio offer resilience even near record highs.
Given its strong fundamentals and positive outlook, the Microsoft stock forecast suggests MSFT remains a solid “Buy” for investors seeking a blend of growth and income.
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