Potential gains from artificial intelligence are still not fully baked into Microsoft , according to Oppenheimer. The firm upgraded Microsoft to outperform from perform. Its $600 per share price target calls for nearly 21% upside from Tuesday’s close. Microsoft is one of the key bellwethers for the AI boom, given the company’s strategic partnership with ChatGPT parent company OpenAI. “Investors’ attention on the ramp of Microsoft’s AI revenue stream will only increase as Azure’s growth remains strong, offering not only valuation support (akin to AWS underpinning Amazon’s valuation), but also upside potential as this revenue stream continues scaling fast and investors embrace Microsoft as one of the long-term AI winners in software,” analyst Brian Schwartz said. MSFT YTD mountain Microsoft stock in 2025. “Sustaining robust growth in its AI business is not fully in the stock, nor is a reacceleration in Azure’s growth in FY26,” he added. “Further, the strength of the AI cycle should drive robust usage of Azure, and support MSFT as a good earnings compounder.” The analyst also said investors may be overlooking the full scale of Microsoft’s ability to monetize AI, and specifically pointed to the company’s cloud segments as a way to do so. “Investors are underestimating the potential for Microsoft’s AI business to drive durable consumption growth for Azure and scale fast in the agentic AI era given how underwhelming the value proposition and use cases for Copilot proved,” he said. Microsoft has advanced more than 17% in 2025. The analyst cautioned, however, that there is ample risk tied to the AI cycle for Microsoft, especially if enterprise customers start to view investments in AI as mostly intended for software that is not yet available to buy. “This development would impact the usage and financials outcome for Azure, and diminish the credit Microsoft is currently receiving in multiples as a perceived AI winner,” Schwartz said.
