Microsoft Stuck in Neutral Despite Bullish Signs

Microsoft has been stuck in neutral for over a year, despite hitting various milestones and receiving bullish ratings from analysts. The company's shares have gone nowhere while the broader market climbed 17%.

The software giant is expected to see a significant boost in earnings power as its Azure cloud computing platform and Copilot AI technology gain traction. However, investors are still waiting for cash flow returns to materialize.

One analyst, Arete Research, sees potential gains of up to 77% for Microsoft shares, which currently trade at $491.65. This estimate is based on the company's ability to convert massive capital expenditures into durable earnings power.

The consensus price target among analysts sits at $572.92, implying a 16.5% upside from current levels. The Street-high call from Arete Research goes much further, with a target of $870, representing about 77% upside.