Microsoft Stock Rises on $665 Target Amid SpaceX Cloud Talks

Microsoft's stock surged past $530 after Melius Research upgraded its price target to $665, citing strong growth prospects in infrastructure sales. Analyst Ben Reitzes cited potential gains from increased infrastructure demands as the key driver behind the upgrade. Meanwhile, GoalVest Advisory boosted its Microsoft holdings by 76,981 shares, signaling investor confidence.

Microsoft is in talks with SpaceX to lease computing capacity, addressing a persistent shortage of resources. Despite plans to spend $175 billion on capital expenditures in 2026, demand continues to outpace supply. SpaceX, expanding its own infrastructure, aims to increase its computing capacity to between 5 GW and 10 GW by next year.

Despite strong financial results, including an 18% revenue increase and 31% net income growth in fiscal 2026, Microsoft faces challenges. High capital expenditures and competition from Google Workspace pose risks. The company is also restructuring its gaming division, cutting 3,200 jobs to improve returns.

Microsoft's stock has shown volatility, recently slipping below $530 after a rebound. The 20-day moving average has acted as a key support level. While infrastructure investments could drive long-term growth, the company must prove these investments will yield sufficient returns to justify the high costs.