'Boredom is beautiful': why are already 99% of analysts advising to buy Microsoft stock?

Investment bank Guggenheim raised its rating on tech giant Microsoft's stock from neutral to "buy," noting the potential for monetizing artificial intelligence in the company's Azure cloud and Office ecosystem. Guggenheim was one of the last Wall Street skeptics of Microsoft, with 99% of analysts now recommending buying the company's securities, and the consensus forecast calls for the stock to rise another 20% or so from current levels.

Guggenheim analyst John DiFucci raised his rating on Microsoft shares from Neutral to Buy, and kept his target price at $586 per share - 12% above the close of recent trading, CNBC reports. Now almost all Wall Street analysts - 99% - recommend investors to buy the securities of the "Magnificent Seven" player, notes Bloomberg. Of the 73 experts following the dynamics of Microsoft shares, only one - Hedgeye Risk Management - maintains a neutral rating, the agency adds. Wall Street's consensus target price of $629.2 implies the company's market value is up another 20% from the last close, according to MarketWatch.

The Guggenheim analyst attributed the upgrade to optimism about Microsoft's ability to capitalize on breakthroughs in artificial intelligence. "While investors are trying to distinguish winners and losers from AI, it's clear to us that Microsoft, like other hyperscale players, is among the beneficiaries," DiFucci said in a note cited by Bloomberg.

According to the expert, the key growth drivers will be the Azure cloud platform and the Microsoft 365 (Office) ecosystem. While Azure benefits from AI adoption directly, Office, on the other hand, represents a less obvious but no less important area of monetization. "We believe that Microsoft is a unique application provider that will be able to directly capitalize on AI by driving up the cost of its products through Office's monopoly position," DiFucci added as quoted by CNBC.

At the same time, DiFucci admitted that Microsoft shares remain expensive and are unlikely to get cheaper in the foreseeable future. But such a valuation, he said, is justified by the scale and sustainability of its business - the company's securities are considered relatively safe due to strong management of its two near-monopoly businesses and the strategic vision of the leadership that is truly transforming Microsoft.

Guggenheim added that Microsoft's high-margin businesses - Windows and Microsoft 365 - help smooth out fluctuations in the investment cycle. The profitability of Windows, he said, is often underestimated, although it is the business that is offsetting margin declines due to the growth of the less profitable Azure cloud segment. "In the case of Windows, boredom is fine," DiFucci emphasized.

Microsoft shares jumped 2% to $534.5 in trading on Oct. 27. This was their highest since August 5, 2025. Since the beginning of the year, the market value of the company has increased by almost 27%. For comparison: the main U.S. stock index S&P 500 for the same period added almost 17%.

Microsoft will present its report for the first fiscal quarter on October 29. Investors will be watching the growth dynamics in the AI segment and the company's investment plans, Bloomberg noted.

This article was AI-translated and verified by a human editor