Microsoft (NASDAQ: MSFT) had a successful 2025, with the company reaching a $4T market cap and its stock up 12% YTD. While the stock has slipped since hitting a new ATH in November, Wall Street still suggests that the best is ahead. 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.
The latest Microsoft Edge update (Stable channel v143, released in December 2025) focuses on security, privacy, and usability improvements. The update was a welcome sight for MSFT investors, sending the stock slightly higher. Last month, Microsoft also signed and sealed a new partnership with INBRAIN Neuroelectronics to bring its AI power into medicine. INBRAIN is working on a line of neural technologies with graphene as a base, and is calling on Microsoft for its agentic artificial intelligence (AI) tools.
Such AI-focused moves have prompted several Wall Street experts to suggest the company will hit a record-breaking market capitalization. “Microsoft will be at a $5 trillion market cap in 2026 as the AI revolution hits its next stage of growth,” Wedbush tech analyst Dan Ives told Yahoo Finance. Microsoft’s current market cap sits at $3.59 trillion
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.
At press time, Microsoft (MSFT) is trading in the middle of its 52-week range and above its 200-day simple moving average. Despite the bearish-sounding market, Bulls still dominantly hold the reins of Microsoft stock forecasts. Out of 62 analysts surveyed by CNN, none call the stock a sell. 98% call MSFT a buy, while the remaining 2% opt to label the stock a hold. Furthermore, several Wall Street analysts, including Bernstein, Evercore ISI Group, and Raymond James, have issued Outperform ratings. The price targets range from $600 to $650, suggesting confidence in further stock appreciation. Achieving such targets could easily send Microsoft to a $5T market cap and perhaps higher next year.
