"Turning the Tide": Microsoft Wins Over One of Wall Street's Last Skeptics

The research firm Stifel has upgraded its recommendation on Microsoft shares from “hold” to “buy” and raised its price target from $530 to $575, according to Bloomberg. The new target price is nearly 16% higher than the stock’s market value at the close of trading on September 22. The rating upgrade signals confidence from one of the few Wall Street research firms that had maintained a cautious stance on Microsoft stock amid its underperformance this year, the agency reports.

"Microsoft clearly turned things around after releasing its earnings report in July," noted the Stifel analyst team led by Brad Rebak. They cited Azure’s steady growth, lower R&D costs for large language models, and OpenAI’s growing contribution to the development of Microsoft’s cloud business as reasons for optimism in the second half of the year, according to Investing.

Previous concerns about pressure on the company’s margins turned out to be “too pessimistic,” Stifel said. Analysts pointed to improved Azure efficiency, the elimination of revenue-sharing payments to OpenAI following a contract revision in April, and an extension of the useful life of assets from 15 to 25 years, according to Investing.

During trading on September 23, Microsoft shares remained virtually unchanged as all major U.S. stock market indices fell. Since the start of the year, the tech giant’s stock has risen by just 3%, lagging significantly behind the Nasdaq 100 index, which has gained nearly 22%, Bloomberg notes. With the exception of Tesla, which fell 15% in 2026, Microsoft has posted the weakest performance among the “Magnificent Seven,” which have risen 11% on average, the agency reports.

At the same time, following Stifel’s rating revision, it has become even harder to find skeptics regarding Microsoft on Wall Street, according to Bloomberg. Fifty-three out of 55 analysts covering the company recommend buying its stock, and not a single one recommends selling it.

In early September, Microsoft disclosed Azure’s quarterly revenue for the first time. With revenue of $29.4 billion for the most recent quarter, Microsoft’s cloud division ranked second in the cloud services market by revenue among the three largest cloud providers, trailing the segment leader, Amazon’s AWS ($42.2 billion), but ahead of Google —Google Cloud ($24.8 billion), Reuters notes.

Previously, Microsoft had shared only growth rates with investors, but had not disclosed the absolute revenue for this business.

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