Microsoft is surging following its earnings beat. Here's what analysts are saying

CNBC

31-07-2025

Analysts and investors liked what they just heard from Microsoft . For the company's fiscal fourth quarter , Microsoft earned $3.65 per share on $76.44 billion in revenue. That's better than the $3.37 per share and $73.81 billion in revenue that analysts surveyed by LSEG were looking for. Azure's revenue growth was a standout figure of the report, as it rose 39% during the quarter. Analysts polled by StreetAccount had expected growth of 34.4%. Looking ahead, Microsoft said it anticipates Azure growing 37%, better than the StreetAccount consensus estimate of 33.7%. Investors were encouraged by the report, as Microsoft shares surged in extended trading Wednesday. Shares were last up more than 8% in the premarket, putting the company on track to reach a market capitalization above $4 trillion . MSFT 1D mountain MSFT, 1-day Several analysts reaffirmed or adopted a bullish view on the stock, including KeyBanc analyst Jackson Ader, who upgraded the stock to overweight from sector weight. "Azure growth solves all problems," wrote Ader in a note dated Wednesday. "The last two quarters have rendered the debates all but irrelevant for the time being. The Azure segment produced roughly $500M and $700M of upside to guidance in the last two quarters, respectively, the equivalent of finding a Monday.com in your couch cushions." "Upside like this is why we do not expect the costs of supporting the Azure business to be debated much for the remainder of the year," he continued. Here is where analysts from key firms stood after Microsoft's earnings. KeyBanc upgrades Microsoft to overweight, re-establishes $630 price target KeyBanc's target implies upside of 23%. "There was no material mention of macro headwinds on the call and, since the time of our fears over needing to cut operating expenses in order to defend margins, Microsoft has laid off over 10,000 employees. We said last quarter we may not have the stomach for many more quarters of major upside while Sector Weight, now we don't have the stomach or the thesis for it." Bank of America maintains buy and top pick rating and raises target to $640 from $585 Analyst Brad Sills' target reflects almost 25% upside. "Microsoft reported another robust quarter, with broad strength across the two key growth franchises, Azure and Office. ... It does not appear that the quarter benefitted from a material improvement in the channel business. In other words, continued improvement there could represent a source of potential upside going forward. ... Q4 results validate our view that Microsoft is an AI beneficiary in both applications and infrastructure. Given the size of the AI software market ($155bn by our estimate), this sets up Microsoft for durable mid/high teens topline growth for years to come." Goldman Sachs reiterates buy rating and lifts target to $630 from $550 Analyst Kash Rangan's target implies almost 23% upside. "We leave with increasing confidence in the longevity of AI-supported growth supporting share capture across Microsoft's businesses. This quarter helped validate our thesis that AI percolates up the stack, the ripple effect of Microsoft's GPU compute leadership drives demand for their wider suite of higher-margin products which, uniquely, cover all layers of the tech stack. We believe that in an agentic world, as AI workloads rapidly scale, Microsoft will see benefits across its business, with demand for more storage, more databases, and more application usage (as well as upside from OpenAI revenue sharing)." Morgan Stanley maintains its overweight rating and ups target to $582 from $530 Analyst Keith Weiss' target calls for more than 13% upside. "While Microsoft clearly illustrated its strong positioning for the key secular growth trends now being seen in software, the core investor question now turns to the durability of that growth. Our view: the solid earnings growth at Microsoft likely proves more durable than investors estimate, a couple of broad points bolstering our optimism." Wells Fargo raises price target to $650 from $600, keeps overweight rating Analyst Michael Turrin's forecast signals a gain of 26%. "In addition to a 4-pt beat driving 4Q growth to 39% cc, the next qtr guide of 37% cc (vs our prior 34%) is a strong starting place for '26. Call commentary pointed to acceleration in core workloads behind large customer strength, migration activity (noted SAP workloads), cloud-native scaling, and AI halo effects (AI driving usage of core). AI contrib. metric was discont'd (as expected), reorienting investors towards total Azure as AI vs non-AI becomes harder to bifurcate." Wolfe Research keeps it outperform rating and hikes target to $675 from $650 Analyst Alex Zukin's target sees more than 31% upside. "Hopes, positioning ( & bogeys) were sky-high this quarter for MSFT to keep the GenAI dream alive with shares trading +22% into the print. But what MSFT delivered was not just 'Olympic' but rather HISTORIC with not just the largest ever Azure 'beat' (450 bps +39% growth for a $75B run rate business) but actually its largest beats across ALL segments as the platform story went 'Flame On'. ... We believe confidence in demand and supply improvements support potential FY26 Azure growth acceleration & we leave the call with even more conviction in the durability of top & bottom line durable mid-teens growth. Given increased scarcity of scaled & durable mid-teens growth, the stage is set for a more premium valuation to match the most premium execution in software." Evercore ISI gives outperform rating and increases target to $625 from $545 Analyst Kirk Materne's target reflects nearly 22% upside. "It was a bit of a 'mic drop' quarter for Azure which at 39% y/y growth blew past Street estimates of 34 35% and even 'whisper numbers' in the 35%-36% range. While the AI contribution to Azure was in line with expectations, the results illustrate that there is a growing AI 'halo' for MSFT's broader suite of cloud services and this is not only showing up in the Azure results, but also in overall commercial bookings which were up 30% y/y, and Commercial RPO of $368bn (+35%). ... While shares have had a massive run over the last few months, we continue to believe there are few companies better positioned to monetize AI adoption in the enterprise and MSFT remains in an enviable position in terms of being able to deliver durable top-and-bottom-line growth at massive scale."