Microsoft shares could rise 41%, says Wells Fargo. What will bring them back to record highs?

Microsoft is preparing to unveil a lineup of its own AI models, strengthening its bet on artificial intelligence. The decision could bring the company's stock back to record highs after it lost 21% of its value from its last high, Wells Fargo said.

Analysts at Wells Fargo raised the target price of Microsoft shares by 4% to $650 and maintained an Overweight rating ("above market"), which corresponds to the recommendation to buy securities, CNBC reports. The new benchmark suggests a potential upside of about 41% relative to the closing price of trading on Monday, June 1.

"The company is better positioned in the software sector than the market believes and is making the right moves to catch up in computing power, AI models and [AI assistant] Copilot," said bank analyst Michael Tarrin, quoted by CNBC.

While Microsoft's development of its own models has been slower than some of its competitors, investments in the software and modeling layers will lead to greater adoption of AI services over time and increase their contribution to the tech giant's business, Wells Fargo said in a note.

Microsoft will unveil several new AI tools at its annual Build conference June 2-3 in California, including a model for programming that will complement GitHub Copilot, The Information reported. Solutions for logical reasoning, speech recognition and image generation are also expected. Microsoft may also share additional details about collaborations with major AI startups, which could be a short-term catalyst for the company's stock gains, Wells Fargo analysts said.

About two-thirds of Microsoft's $37 billion AI business is now likely due to the use of the Azure cloud platform by AI leaders OpenAI (creator of ChatGPT) and Anthropic (developer of chatbot Claude), as well as the company's share of OpenAI's revenue, according to a Wells Fargo estimate. Microsoft 365, GitHub Copilot and other AI services form the rest.

Microsoft shares rose by 2.3% on June 1. At the same time, compared to the beginning of 2026, the company's securities are now almost 5% cheaper. They are far behind the U.S. broad market index S&P 500, which grew by 11% over the same period.

Microsoft's recent stock performance is an encouraging signal that the rally in artificial intelligence stocks is "sustainable," according to Evercore ISI analyst Kirk Matherne, whose opinion was cited by MarketWatch.

Of the 60 analysts tracking Microsoft securities, 56 recommend buying the company's shares and assign them a Buy or Strong buy rating, CNBC writes with reference to LSEG data. The average target price of the tech giant's securities is $559.81, according to MarketWatch. It means potential growth of quotations by 22% relative to the last closing of trades.

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