Morgan Stanley analysts have initiated a bullish projection for Microsoft (MSFT) inventory primarily based on favorable software program spending plans. This previous week, analysts labeled MSFT as an “obese” inventory, sustaining a worth goal of $650. This forecast suggests an upside potential of practically 38%.
Microsoft has kicked off 2026 on the incorrect foot, with shares falling 4% since January 1. Happily, Morgan Stanley doesn’t see this bear streak lasting for much longer. Whereas indicating favorable software program spending plans, the analysts’ latest report outlined expectations of software program spending progress to extend by 9 foundation factors YoY, from 3.7% in 2025 to three.8% in 2026. Microsoft is poised to learn from this strengthening atmosphere as CIOs anticipate 7.3% progress for the corporate in 2026.
As well as, Microsoft additionally stands to learn from its latest AI investments and improvement efforts. Not too long ago, the corporate introduced plans to construct a brand new facility on a 237-acre web site in Lowell Township, Michigan. The transfer despatched MSFT inventory increased this previous week, however it was quickly corrected after issues have been raised concerning the power prices the info heart would incur. At press time, MSFT is buying and selling in the midst of its 52-week vary and beneath its 200-day easy shifting common.
Moreover, quite a few Wall Road analysts have upped their forecasts for Microsoft (MSFT) inventory in 2026. Wedbush’s Dan Ives calls Microsoft a “core winner” for 2026, arguing that Azure might transfer from pilots to broad enterprise deployments as CIO budgets shift. Evercore ISI’s Julian Emanuel provides a cautionary word however says systemic dangers tied to the AI commerce stay restricted, given wholesome hyperscaler steadiness sheets and muted cross-holdings.
