Despite the company lagging behind some of the other Magnificent Seven stocks, Microsoft (MSFT) and its Azure business are seemingly driving increased price targets. Indeed, the company has gotten some renewed buzz ahead of its highly anticipated Q1 2025 earnings report.

Over the past six months, Microsoft has underperformed the Nasdaq benchmark. However, it did showcase a jump in early trading as Wall Street revised its projection for the company. With the earnings report due later this week, MSFT is looking to be in prime position to benefit.

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Microsoft Azure Driving MSFT Buzz Ahead of Key Report?

Throughout the last year, the tech sector has undergone a pretty substantial transformation. With AI and cloud-based computing surging to the forefront of demand, companies have been forced to adjust. That has seen companies like Nvidia (NVDA) surge while hurting the stock price of firms like Intel (INTC).

One business that has certainly benefitted is Microsoft, whose Azure company is driving increased price target ahead of MSFTs upcoming Q1 2025 earnings report. Indeed, the company’s cloud-based computing product has been the biggest driver of its growth.

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The cloud division grew 29% in fourth quarter revenues. Moreover, cloud revenues as a sector increased 19% to reach $28.52 billion. However, both figures were below analysts expectations. That doesn’t stop it from being a key reason for a potential price target for the company.

“We expect [Microsoft] to gain more clarity in 2H Azure/AI demand trends and receive reassurance regarding capex/returns,” CitiGroup analyst Tyler Radke said in a recent note. “We recommend buying on the recent pullback, as we expect investor sentiment to turn more positive following the Q1 earnings report,” he added.

Moreover, Radke noted that positive sentiment will come from “reacceleration in Azure growth and EPS growth in the second half of the fiscal year.” The analysts has given the stock a buy rating while placing a twelve-month price target at $497.