TLDR
- Microsoft stock has been flat at $520 since July 30 earnings while Apple gained 25%
- October 29 earnings expected to show 11% profit growth driven by Azure cloud unit
- Analysts forecast Azure revenue will surge over 30% from last year
- New Copilot AI features launched with 12 updates focused on personalization
- Stock faces key technical test with resistance at $530 and support at $517
Microsoft has been stuck in neutral for three months. Shares sit at $520, virtually unchanged since the company reported earnings on July 30.
During that same period, the Nasdaq jumped nearly 9%. Apple climbed more than 25% and reclaimed its spot as Microsoft’s market cap twin.
The stagnation ends next week. Microsoft reports fiscal first-quarter 2026 results on October 29, and Wall Street expects the cloud business to steal the show.
Analysts project earnings will grow nearly 11% from last year. That’s solid for a company worth around $4 trillion.
Azure is the engine behind those numbers. The cloud division should post revenue growth exceeding 30%, according to FactSet estimates.
UBS analyst Karl Keirstead sees the momentum building. He notes enterprise customers and partners report accelerating growth trends for Azure.
His $650 price target sits 25% above current levels. Keirstead believes Microsoft’s OpenAI partnership will push Azure even higher in coming years.
Some worry about spending. Microsoft is pouring billions into AI infrastructure, and too much could squeeze profit margins.
CFRA Research analyst Angelo Zino isn’t concerned. He expects capital expenditure growth to moderate next year.
Zino argues future spending will shift more toward servers and hardware. That should support more profitable AI growth, he writes.
Azure’s Growing AI Contribution
The cloud unit should maintain strong growth through 2026 and beyond. AI services will make up a larger slice of overall sales.
Zino estimates AI could reach high teen percentages of total revenue within a few years. That’s a major shift in the business mix.
Microsoft closed Thursday at $520.57, down 0.28%. The company unveiled its Copilot Fall Release the same day.
The update includes 12 new features. They emphasize personalization, collaboration, and enterprise integration.
CEO Satya Nadella continues tying AI investments to Microsoft’s core products. That includes Office 365, Azure, and LinkedIn.
The company reported 21% advertising revenue growth earlier this year. Much of that came from Copilot-driven tools and insights.
Technical Picture Shows Decision Point
The stock has been consolidating since bouncing from September lows near $492. It’s holding within an ascending channel.
Resistance stands at $526. Support sits at the 50-day moving average around $517.
The $523 to $530 range represents a critical zone. A breakout above it could push shares toward $541.
That level matches the 78.6% Fibonacci retracement from July’s $554 peak. A clean move through there opens the door to summer highs.
Failure to hold $517 would be a different story. The stock could slide to $505 or test the 200-day moving average near $497.
Microsoft is up nearly 25% in 2025. That outpaces Apple and Amazon, which have lagged this year.
The stock trades at 28.5 times forward earnings. That’s in line with its five-year average, neither cheap nor expensive.
Jake Seltz manages the Allspring LT Large Growth ETF. Microsoft is the fund’s second-largest holding.
He told Barron’s the recent underperformance is unwarranted. The company dominates with Azure and cloud computing, he says.
Mizuho Securities analyst Jordan Klein calls Microsoft a quality tech stock. He sees real AI upside and growth potential.
Klein labels it a “super compelling” long-term buy. Next week’s earnings could prove him right.
The Copilot rollout closed at $520.57 on Thursday, down slightly from the previous session.
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