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 “chubby” inventory, sustaining a value goal of $650. This forecast suggests an upside potential of practically 38%.
Microsoft has kicked off 2026 on the improper 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’ current report outlined expectations of software program spending development to extend by 9 foundation factors YoY, from 3.7% in 2025 to three.8% in 2026. Microsoft is poised to profit from this strengthening surroundings as CIOs anticipate 7.3% development for the corporate in 2026.
As well as, Microsoft additionally stands to profit from its current AI investments and improvement efforts. Lately, the corporate introduced plans to construct a brand new facility on a 237-acre website in Lowell Township, Michigan. The transfer despatched MSFT inventory larger this previous week, nevertheless it was quickly corrected after issues had been raised concerning the power prices the information heart would incur. At press time, MSFT is buying and selling in the course of its 52-week vary and under its 200-day easy transferring 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 may transfer from pilots to broad enterprise deployments as CIO budgets shift. Evercore ISI’s Julian Emanuel provides a cautionary observe however says systemic dangers tied to the AI commerce stay restricted, given wholesome hyperscaler steadiness sheets and muted cross-holdings.
