Microsoft (MSFT) Stock Forecast & Price Target

The analysis reveals a positive outlook for Microsoft's stock, driven by an estimated 12% year-over-year growth in Windows PC shipments in developed regions, significantly outpacing initial projections. Additionally, there is an expectation of increased revenue, with a plausible adjusted New ARR growth rate of 30%, suggesting a revenue growth of 16% year-over-year, which is 250 basis points above consensus estimates. Moreover, strong partner feedback regarding Azure and Copilot deployments, combined with the potential to add approximately $25 billion to revenue by FY26, underscores Microsoft's robust position in the market, bolstered by its monopolistic status in M365 and the ability to capitalize on incremental AI revenues.

The analysis indicates a negative outlook for Microsoft's stock, primarily driven by projected declines in Windows OEM and Devices revenue, which are expected to decline by approximately 2.2% year-over-year, reflecting worsening business momentum. Additionally, although Azure's revenue growth is projected to remain strong at 37.4%, the anticipated significant drop in new annual recurring revenue (ARR) suggests a troubling trend, with declines expected to be around 15% year-over-year compared to a prior quarter's growth of 67%. Finally, potential declines in non-Dollar sales may further amplify revenue challenges, particularly alongside a forecasted 10% reduction in Devices, indicating a compounded effect on Microsoft's overall financial performance.