Microsoft’s ‘Eye-popping’ Q4 AI, Cloud Strength Wins A Price-Target Hike — Analyst Says ‘Watershed Quarter For Redmond’

Microsoft (MSFT) stock received the first of the likely many price target boosts following its standout quarterly performance. 

Wedbush analyst Daniel Ives lifted the price target for Microsoft stock to $625 from $600, while keeping the rating at ‘Outperform.’ The analyst attributed the revision to the “eye-popping” strength of its cloud and AI divisions.

The updated price target implied nearly 22% upside from the stock’s Wednesday closing price.

“This was a watershed quarter for Redmond,” said Ives, as he lauded the strong revenue performance. The topline came in at $76.44 billion for the fourth quarter of the fiscal year 2025, topping the Fiscal.ai-compiled consensus of $73.86 billion.

According to the analyst, the robust year-over-year revenue growth (18%) was driven by the Azure cloud business (up 39%). Azure revenue surpassed $75 billion this year.

In comparison, Google Cloud revenue climbed 31.7% during the quarter.

CEO Satya Nadella said, “Cloud and AI is the driving force of business transformation across every industry and sector.”

The earnings per share increased 24% to $3.65, surpassing the $3.38 consensus. 

Looking ahead, the company expects first-quarter revenue of:

• $32.2 billion to $32.5 billion for Productivity and Business Processes
• $30.1 billion to $30.4 billion for Intelligent Cloud
• $12.4 billion to $12.9 billion for More Personal Computing

The company expects Azure and other cloud services revenue growth of 37% in constant currency, higher than the 34% the Street was modeling, according to Ives.

 Overall, the company expects revenue to grow in double digits in fiscal year 2026, with moderate capital expenditure growth. 

Ives termed the guidance as “strong,” as the next fiscal year remains the true inflection point for AI growth at Microsoft. 

CFO Amy Hood stated on the earnings call that first-quarter capital expenditures would exceed $30 billion, driven by strong demand signals.

On Stocktwits, retail sentiment toward Microsoft stock was ‘extremely bullish’ by late Wednesday, with the positivity improving from a day ago. The 24-hour message volume increased to ‘extremely high’ levels.

The stock was among the top ten trending equity tickers on the platform early Thursday.

A bullish user lauded Microsoft as an “incredible stock,” adding that “A must-have for every concentrated portfolio of high-quality compounders.”

Another user discussed the possibility of a “golden cross” technical formation, considered bullish, at the $550 level.

Microsoft stock has gained over 22% this year.

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