Microsoft's AI Capex Surpassing $100 Billion: Can Shares Hit $700 by 2027?

Microsoft's AI sector has reached new heights, crossing $100 billion in annual Azure revenue and surpassing 30 million paid Copilot seats. However, despite these impressive milestones, Microsoft shares have remained flat this year.

The company's investment in AI infrastructure stands at a staggering $116 billion for FY26, projected to reach approximately $175 billion in FY27. This significant capex is the primary factor suppressing the stock price, with investors worried about return on investment (ROI).

With 31% earnings growth and a 95% analyst bullishness consensus, it's surprising that targets aren't marching higher. Analysts are underestimating the Copilot inflection point, which has already occurred.