Microsoft Upgraded to Buy as Analysts Highlight AI and Azure Growth

Microsoft (MSFT) shares reached an all-time high following a strong performance in recent months, driven by bullish sentiment from analysts. Melius Research upgraded the stock to ‘Buy’ from ‘Hold’, citing growing concerns around AI risks as a catalyst for established tech leaders like Microsoft. The firm set a $665 price target, suggesting a 27% upside from the stock’s Monday close, emphasizing Microsoft’s role in securing AI models and autonomous agents for enterprises.

Scotiabank and Piper Sandler also raised their price targets, highlighting Microsoft’s enterprise AI opportunities. MSFT surged nearly 38% from July through September, marking its best quarterly performance since 1998. The stock has gained 2.4% so far in October, with 55 of 56 analysts rating it ‘Buy’ or higher, per Koyfin data.

Microsoft’s momentum follows strong fiscal fourth-quarter results, with Azure growth accelerating 43% year over year and revenue rising 18% to $90 billion. The company forecast 45% Azure growth for the first quarter of fiscal 2027. Additionally, Microsoft 365 Copilot surpassed 30 million paid seats, while Agent 365 had nearly 40 million registered agents across tens of thousands of companies.

Retail sentiment on Stocktwits remained ‘neutral’, with traders noting the stock’s steady climb. The Information reported that Microsoft and Meta Platforms are reducing their workforce’s reliance on Anthropic’s Claude AI models, cutting projected spending by more than a third.