Microsoft Becomes Top Analyst Pick as Q4 Results ‘Change the Narrative’

Microsoft Corporation (NASDAQ: MSFT ) shares are trading higher after the company beat analyst estimates in the fourth quarter for both revenue and earnings per share.

Analysts see more upside ahead with price targets of $522 and beyond.

The Microsoft Analysts Cantor Fitzgerald analyst Thomas Blakey maintained an Overweight rating on Microsoft and raised the price target from $502 to $522.

DA Davidson analyst Gil Luria reiterated a Buy rating with a price target of $550.

JPMorgan analyst Samik Chatterjee maintained an Overweight rating with a price target of $550.

Read Also: Microsoft Short Interest Hits Highest Level Since 2015 as Bears Dig in Ahead of Earnings Cantor Fitzgerald on MSFT Stock Microsoft showed upside across key segments like Azure, Copilot and its AI platform, Blakey said in a new investor note.

The analyst also highlighted Microsoft’s unchanged capex guidance. "Capex guide for C26 was unchanged, including capital-lease-related accounting changes announced on the call, which should be viewed positively," Blakey said.

Microsoft saying its fiscal 2027 will be free cash flow positive was another highlight for the analyst, who said this should be "viewed positively" given worries about return on investment. "We view F4Q26 and initial outlook for F1Q27 as further validation of our AI-led secular growth story for Microsoft, with numerous accelerating AI-driven KPIs and no NT uptick to capex." DA Davidson on MSFT Stock Luria calls Microsoft "the adult in the room" in a new investor note.

Microsoft reported a very strong F4Q26 with accelerating Azure growth, provided responsible CapEx guidance and assured investors free cash flow would remain positive," Luria said.

The analyst said this should "change the narrative on Microsoft." "MSFT remains a top pick within our coverage." JPMorgan on MSFT Stock Microsoft is "finding the right balance in growth" between Azure, margins and capex, Chatterjee said in a new investor note. "Microsoft results and outlook stand out, in our view, for the balance that the company is able to demonstrate," Chatterjee said.

The analyst said investors should be looking for a balance between AI infrastructure buildout and revenue growth. "Microsoft is showing momentum with AI across its app business, including the doubling net new seat adds for Copilot." Chatterjee said the two key AI products are showing strength, with Azure growth up 39% year-over-year in the quarter and Microsoft 365 Copilot surpassing 30 million paid seats, with net seat adds more than doubling sequentially.

Microsoft Stock Price Action Microsoft stock is up 15.6% to $451.38 on Thursday versus a 52-week trading range of $349.20 to $555.45.

Microsoft stock is down 4.7% year-to-date in 2026.

Read Also: Microsoft's Copilot Just Crossed 30 Million Paid Seats as CEO Satya Nadella Unveiled Unified App: 'Major Step Forward' Image via Shutterstock