Microsoft Corporation (NASDAQ:MSFT) analysts weigh in on the company's strong cloud growth shown in the company's fourth-quarter financial results.
Here's what analysts are saying about the results and what's next for Microsoft.
- Wedbush analyst Dan Ives maintained an Outperform rating on Microsoft and raised the price target from $600 to $625.
- Cantor Fitzgerald analyst Thomas Blakey reiterated an Overweight rating and raised the price target from $581 to $639.
- KeyBanc analyst Jackson Ader upgraded the stock from Sector Weight to Overweight with a price target of $630.
- WestPark Capital analyst Curtis Shauger reiterated a Hold rating with no price target.
- Bank of America analyst Brad Sills reiterated a Buy rating and raised the price target from $585 to $640.
Wedbush: Ives praised Microsoft for its "eye-popping cloud and AI strength in the [fourth quarter]."
"Microsoft delivered strong 4Q25 results with strong guidance to start the year as the company's ‘shining moment' is now underway with AI already changing the growth trajectory of MSFT's cloud growth story," Ives said.
Microsoft's launch of Azure AI Foundry, the analyst explained, is critical for customers. It’s also seeing strong usage across Fortune 500 companies. The company provided strong guidance, and fiscal 2026 could be the "true inflection year” of AI growth, he added.
"We believe Microsoft is just hitting its next phase of monetization on the AI front."
Cantor Fitzgerald: Demand outstripped supply for Microsoft's cloud services in the fourth quarter, Blakey said in a new investor note.
"Strength in Azure was driven by Microsoft's largest customers' core infrastructure business as new cloud and AI workloads are built and scale across services," Blakey said.
The analyst said Microsoft's strength was likely related to AI with Azure AI contribution increasing in the future. The company's infrastructure offerings impressed analysts, considering 80% of Fortune 500 customers are using them.
Microsoft remains “well-positioned to leverage its capex over the long term,” Blakey added. Its full stack of applications, infrastructure services, security offerings, and open APIs will continue to serve customers “on their AI journey."
KeyBanc: Ader said the Sector Weigh rating for Microsoft was "terribly timed" and "short-lived" with an upgrade back to Overweight.
"The company has effectively reduced the argument for neutrality to ‘the stock has really run' and bolstered the argument for positivity on almost every front," Ader said.
The analyst said "Azure growth" could solve all problems, including higher capex. Azure had between $500 million to $700 million of upside to guidance in the last two quarters, Ader noted.
Ader does not expect much debate regarding the costs of supporting the Azure business. He also noted that no macroeconomic headwinds were mentioned on the call.
"Amazingly, Azure is still experiencing capacity constraints, and demand continues to outstrip supply, which means there is potential for upside as this unlocks."
WestPark: Azure helped accelerate revenue throughout the quarter, Shauger said in a new investor note.
Shauger stated that the Hold rating is assigned to Microsoft stock, which has a balanced risk-reward profile for the next 12 months.
Cloud, AI and Azure growth shows across all the company's segments, Shauger added, noting how revenue growth was better than expected.
Bank of America: A strong Q4 with AI and cloud tailwinds makes the stock a top pick, Sills said.
"Microsoft reported another robust quarter, with broad strength across the two key growth franchises, Azure and Office," Sills said.
The analyst noted that Microsoft demonstrated "particular strength" in cloud migration deals for its large enterprise segment.
"Q4 results validate our view that Microsoft is an AI beneficiary in both applications and infrastructure."
Price Action: Microsoft stock is up 4.4% to $535.56 on Thursday versus a 52-week trading range of $344.79 to $555.45. Microsoft stock is up 28% year-to-date in 2025.
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