Microsoft shares surged nearly 10% in after-hours trading, climbing from $390.54 to $428.91 following the company’s latest earnings report. The strong results triggered a wave of analyst upgrades, with most now rating the stock as a strong buy.
Among over a dozen analyst notes, only one from Stifel Nicolaus held a "Hold" rating, but even that came with an increased price target from $400 to $450. On the bullish end, RBC Capital’s Rishi Jaluria set a 12-month price target of $640, while Bernstein’s Mark Moerdler updated his target slightly from $646 to $647. Wall Street expects Microsoft to climb about 42% on average, targeting $556.29 per share within the next year.
Earnings Spark Optimism
Microsoft’s report showed $90.01 billion in revenue and earnings per share of $4.74, beating forecasts of $87.62 billion and $4.24 EPS. Its Azure cloud segment grew 43%, outpacing the predicted 40%, which helped fuel investor enthusiasm despite rising capital expenditures. This contrasts with recent cautious reactions to earnings from Google and Meta.
The stock’s sharp rebound erased some of the year’s losses. After falling 17.4% since January 2, Microsoft’s market cap drop narrowed from $750 billion to about $500 billion. This turnaround hints at renewed confidence in the tech giant’s growth trajectory.
