Wedbush analysts believe Microsoft Corp (NASDAQ:MSFT) has a “comfortable” lead in the AI revolution and expects the tech giant’s upcoming fiscal first quarter 2026 earnings and outlook to be “robust”.
In a note to clients on Wednesday, the analysts stated that Microsoft’s stock, in their opinion, has yet to price in the next wave of Cloud and AI growth, given what they called the company’s strong competitive Cloud edge over Amazon and Google.
“Our thesis remains that the Coud and AI monetization is going to comprise a larger piece of (Microsoft) going forward and will ultimately spur growth and margins over the coming years," the analysts wrote.
They maintained their ‘Outperform’ rating and $625 per share target price on the stock, viewing Microsoft as being in the midst of hitting its next phase of AI monetization.
Also weighing in on Microsoft's pending results were UBS analysts, who believe the company’s near-term catalysts “appear to be compelling”.
These include the potential for Azure growth to exceed the high end of the guidance range of 37%, the ability of Microsoft to protect its earning per share with cost control measures, the pending announcement of the revised Microsoft-OpenAI partnership agreement as well as the potential for a large OpenAI-Microsoft deal.
The analysts at UBS reiterated their 'Buy’ rating and $650 per share target price on Microsoft stock.
Microsoft shares rose 1% to $522.80 in midday trading on Wednesday.