Microsoft (MSFT) had a successful 2025, with the company reaching a $4T market cap and its stock up 15% YTD. While the stock has slipped since hitting a new ATH in November, Wall Street still suggests that the best is ahead, with analysts projecting gains of 30% in the new year. As a result, Microsoft is recognized as a top investment choice for 2026 due to its undervalued AI growth potential and accelerating financial results.

A major part of the reason for these bullish expectations is the success of Microsoft’s Edge AI and Azure Cloud Computing platforms. Both have worked in tandem thanks to the Windows developers’ AI investing that has reaped immense benefits. Additionally, the company’s October quarterly results showed revenue of about $78 billion and roughly 40% growth in Azure and cloud services.

In addition, Microsoft has transformed itself into the cloud computing sector with Azure. It is among the leading cloud services experiencing rapid growth and is a key driver of the technology. Azure’s revenue growth is now outperforming its core legacy businesses like Windows and Office. Therefore, Microsoft stock has more chances of remaining rock solid in the charts with robust performance.

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2026 Microsoft (MSFT) Stock Forecasts Get a Boost

As a result of this AI success, numerous Wall Street analysts have upped their forecasts for Microsoft (MSFT) stock in 2026. Wedbush’s Dan Ives calls Microsoft a “core winner” for 2026, arguing that Azure could move from pilots to broad enterprise deployments as CIO budgets shift. Evercore ISI’s Julian Emanuel adds a cautionary note but says systemic risks tied to the AI trade remain limited, given healthy hyperscaler balance sheets and muted cross-holdings.

Furthermore, Analysts Bernstein and Evercore ISI Group, both highly accurate in predicting price targets historically, have set ambitious targets of $645 and $640, respectively. Piper Sandler also maintains a strong stance with a $650 target. Each of these firms on Wall Street is calling MSFT a buy, marking it as one of the top buys among the magnificent-7 stock grouping. At press time, MSFT is trading in the middle of its 52-week range and above its 200-day simple moving average.