Wedbush has raised its price target on Microsoft Corp (NASDAQ:MSFT) to $600, up from $515, citing a surge in enterprise demand for artificial intelligence services through its Azure cloud platform and Copilot software suite.
The broker, which maintains its "outperform" rating and includes the company on its Best Ideas list, described the current environment as Microsoft's "shining moment".
Analyst Dan Ives said: "We strongly view this as Microsoft's shining moment with AI set to change the cloud growth trajectory in Redmond."
Wedbush's field checks suggest a sharp increase in deal conversions and pilot programmes becoming enterprise-wide deployments, particularly in financial services, government, and retail.
AI adoption
It expects more than 70% of Microsoft's customer base will adopt some form of enterprise AI by 2028.
Capital spending is also scaling rapidly, with Microsoft forecasting $80bn in investment for fiscal 2025 alone. That spend is expected to rise further in 2026 to support new data centre build-outs and broader AI capabilities.
Wedbush estimates that for every $100 spent on Azure, there's now an incremental $50 in AI-related spend, up from $40 previously. Copilot alone could drive an additional $25bn in revenue by 2026, the analysts said.
Despite intensifying competition from Amazon and Google, Wedbush believes Microsoft's combination of infrastructure scale, software integration, and AI-first strategy puts it in the lead.
Scaling the heights
With customers now scaling deployments and budget lines being allocated, the broker argues that the market has yet to fully appreciate the revenue potential.
"Microsoft is just hitting its next phase of monetisation on the AI front," said Ives. "More enterprises are accelerating their AI budgets and strategic footprint with Redmond into FY26."
The group reported a 13% rise in annual revenue to just over $279bn in fiscal 2025, with earnings per share forecast to climb further to $14.88 in 2026.