Momentum has been quietly building around Microsoft (MSFT) stock.
It’s been a steady build for the tech giant, backed by strong momentum, sustained interest, and a growing sense that something more could be coming.
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Just ahead of its hotly anticipated earnings event, one respected firm made a major adjustment.
It’s the kind of shift that screams for attention, and for those who track tone as much as numbers, this one landed differently.
Microsoft’s AI engine is firing on all fronts
Microsoft hasn’t just ridden the AI wave; it’s effectively built the surfboard.
Over the past year, it has doubled down on AI and cloud, turning its humongous tech platform into a full-blown enterprise AI machine.
At the core of it all is its cloud engine in Azure and its AI-powered assistant in the Copilot assistant.
Azure is doing the heavy lifting.
Sales from Microsoft’s Intelligent Cloud segment jumped to $26.8 billion last quarter, up more than 20% year-over-year.
Azure alone pushed into the mid-30s growth range, led by relentless demand for cloud migrations and AI-powered workloads.
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That demand didn’t happen by accident.
Microsoft has been pumping billions into global infrastructure, including data centers, compute capacity, and AI-specific expansion.
The result is that Azure is quickly becoming the go-to platform for companies building large-scale AI infrastructure.
On the user side, Copilot is starting to look like a secret weapon in Microsoft’s repertoire.
Since its launch a couple of years ago, Copilot now touches everything from Office to Windows to GitHub.
The baked-in productivity layer is gaining massive traction, and analysts peg its annual run rate at around $10 billion.
Recent upgrades make it even stickier: AI vision tools, desktop automation, and developer features turn Copilot into a can't-miss kind of assistant.
Meanwhile, Microsoft’s AI focus extends deep into security and analytics.
Azure Data Explorer is pushing real-time insights, and Copilot for Security continues to automate incident response while tying AI directly into Defender and Sentinel.
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That power-packed fusion of cloud, data, and defense is becoming a critical value pitch.
With these engines humming, Microsoft’s market impact is obvious.
It has seen nine consecutive quarters of EPS growth, and sales neared $70 billion in a single quarter, along with a market cap brushing $4 trillion.
Microsoft heads into earnings with fresh optimism
Microsoft heads into its July 30 earnings report with major momentum, and now a significantly higher price target to match.
Bank of America just raised its price target on Microsoft stock to $585, up from $515. It also reaffirmed it as a “Top Pick,” citing partner checks that show solid deal activity across cloud and software lines.
The bullish outlook leans heavily on Azure.
In particular, cloud migrations, security, and data analytics are driving growth, with analysts now modeling Azure’s year-over-year gain at 35.5% in constant currency.
The robust cloud platform has also been significantly boosted by a healthy 18 percentage points from AI-related demand.
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That’s slightly above BofA’s previous 34.2% base case, and though a subtle beat, in this market, subtle matters.
On the productivity side, Office continues to throw its weight around.
BofA sees commercial Office growing 15%, beating the previous 14% forecast. Copilot, Microsoft’s AI assistant suite, is also gaining ground, with partner feedback showing adoption is picking up, especially around E3/E5 licenses.
Even the PC business is seeing a bit of a lift. Mobile and Personal Computing could post 3.4% growth, on the back of stronger-than-expected global PC shipments in Q2.
That’s ahead of BofA’s 2.4% call and shows that hardware softness might be stabilizing.
Looking ahead, analysts feel Microsoft is holding its pace into fiscal 2026, with sales growth expected to stay around 14%.
That’s got everything to do with Azure’s growing share of the pie and early signals of a ramping Copilot cycle.
Plus, with its stock up nearly 30% since last quarter, the bar is a lot higher. Nevertheless, the sentiment remains firm, and Microsoft isn’t showing signs of slowing.
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