As 2025 winds down, Microsoft (MSFT) sits near record territory, trading around $492 per share with a market capitalization of roughly $3.7–3.9 trillion and a trailing price-to-earnings (P/E) ratio in the mid‑30s. [1]
Earlier in 2025 the company even briefly crossed the $4 trillion mark, joining Nvidia in one of the most exclusive clubs in market history. [2] With AI, cloud and productivity software all firing at once, investors are increasingly asking a simple question:
What could Microsoft’s stock price look like by the end of 2026?
This article pulls together Wall Street price targets, earnings forecasts, DCF valuations, algorithmic models and the latest AI news to build a reasoned — and clearly labelled — scenario-based Microsoft stock price forecast for 2026.
⚠️ Important: Nothing here is investment advice. It’s informational analysis based on publicly available data as of late November 2025. Always do your own research or talk to a licensed advisor before investing.
1. Where Microsoft Stock Stands Going Into 2026
Valuation snapshot
Recent data show:
- Share price: about $492
- Trailing EPS: roughly $14.0–14.1
- Trailing P/E: around 35x
- Forward P/E: low 30s, based on analyst estimates
- Market cap: approximately $3.7–3.9 trillion [3]
For a megacap, those multiples are rich but not off-the-charts by recent AI‑driven standards, especially given Microsoft’s earnings growth.
Recent earnings momentum
Microsoft’s fiscal year 2025 (ended June 2025) delivered:
- Revenue: about $281.7 billion, up ~15% year‑over‑year
- Operating income: about $128.5 billion, up ~17% YoY [4]
The latest reported quarter, Q1 FY 2026 (ended Sept. 30, 2025), showed that momentum accelerating:
- Revenue:$77.7B, up 18% YoY
- Microsoft Cloud revenue:$49.1B, up 26%
- Azure and other cloud services: revenue up ~40% YoY
- Operating income:$38.0B, up 24%
- Non‑GAAP EPS:$4.13, up 23% YoY
- Commercial remaining performance obligations (RPO):$392B, up 51% — a powerful indicator of multi‑year demand. [5]
On top of that, Microsoft returned $10.7B to shareholders in Q1 FY 2026 alone via dividends and share repurchases. [6]
Put simply: Microsoft is growing fast, at massive scale, with fat margins. That’s the backdrop for any 2026 price forecast.
2. Wall Street’s Microsoft Price Targets Through Late 2026
Because we’re in late 2025, most 12‑month targets effectively speak to where analysts think MSFT could trade by late 2026.
Across several major aggregators, the numbers line up surprisingly well:
- MarketBeat: average 12‑month target $634.33 (high $730, low $490) [7]
- Investing.com: average target ~$625, high $730, low $483, with a “Strong Buy” consensus [8]
- TipRanks: average $629.98, high $700, low $500, based on 35 Wall Street analysts; consensus rating: Strong Buy [9]
- Valueinvesting.io: average $634.71, median $642.60, range $449–$766, based on 70 analysts; consensus: BUY [10]
- 24/7 Wall St., summarising Street targets, cites a median one‑year target around $629.98, plus its own more conservative year‑end 2025 target of $563.64. [11]
At today’s price near $492, that implies roughly 25–30% upside in the average analyst scenario, and potentially more in optimistic cases.
Analyst sentiment is also extremely positive:
- Dozens of firms rate MSFT a “Strong Buy”, with some surveys showing all or nearly all analysts at “Buy” or equivalent. [12]
- Individual firms like Morgan Stanley, HSBC, Guggenheim and others have recently set or raised price targets in the mid‑$500s to mid‑$600s, often citing AI and Azure as key drivers. [13]
So, Wall Street’s late‑2026 MSFT picture is broadly:
Base case: somewhere around $625–$635, with bullish targets stretching toward $700+ and conservative cases closer to $500.
3. Earnings Forecasts for 2026–2027: What’s Under the Hood?
Price targets are ultimately just valuation multiples applied to earnings expectations — so the 2026 forecast starts with EPS.
EPS consensus for 2026
Different data providers publish slightly different numbers, but they cluster in the mid‑teens for FY 2026:
- Nasdaq: consensus FY 2026 EPS around $15.85 [14]
- Seeking Alpha: FY 2026 consensus $16.22, with revenue around $326.8B [15]
- StockAnalysis: “EPS This Year” (fiscal year) $15.95, revenue $331.41B [16]
- Zacks: another view has current fiscal EPS at $14.44, next year $17.36, reflecting differences in GAAP vs. adjusted metrics. [17]
Overall, it’s reasonable to say:
Consensus 2026 EPS sits roughly in the $15.5–16.0 range, with revenue growth in the mid‑teens percentage.
EPS consensus for 2027
For 2027, expectations push earnings into the high teens:
- Seeking Alpha lists a FY 2027 EPS consensus around $18.7. [18]
- StockAnalysis shows “EPS Next Year” at $18.89, off a base of ~15.95. [19]
- A recent AI‑focused analysis hosted on Finviz cites Wall Street estimates of $15.69 EPS in 2026 and $18.63 in 2027, and notes that maintaining Microsoft’s current P/E would push its market cap toward $4.7–5 trillion over the next few years. [20]
So a broad takeaway:
By 2027, analysts expect Microsoft to earn close to $19 per share, roughly 30–35% above today’s trailing EPS.
Those earnings trajectories are the backbone of most 2026 price forecasts.
4. Fair‑Value Models: DCF and Intrinsic Value Estimates
Beyond simple multiples, some platforms run detailed discounted cash flow (DCF) or intrinsic value models:
- Simply Wall St uses a two‑stage DCF based on current free cash flow of about $89.4B and forecasts rising to roughly $206B by 2030. It pegs Microsoft’s intrinsic value around $608 per share, calling the stock ~22% undervalued versus current prices. [21]
- The same analysis argues that Microsoft’s current P/E (low‑30s) is well below a “fair” P/E of about 57x, given its growth, margins and risk profile — though that “fair” multiple is obviously more subjective. [22]
- Trefis takes a more conservative approach, estimating fair value at about $535 per share, or roughly 15% upside from levels around $460 at the time of its May 2025 report. [23]
These DCF and valuation models aren’t predictions of where the market will price Microsoft in 2026, but they reinforce a broad theme:
Many fundamental models see Microsoft as slightly to meaningfully undervalued even after its huge AI run‑up.
5. Algorithmic and Long‑Term Web Forecasts for 2026
A completely different camp uses algorithmic or purely quantitative models to generate multi‑year price paths. These are best treated as curiosities or sentiment gauges, not investment blueprints — but they’re part of the 2026 conversation.
WalletInvestor
- WalletInvestor projects MSFT could rise from about $492 to around $550–551 over the next 12 months — roughly +12% — and reach about $857 by 2030. [24]
CoinPriceForecast
- CoinPriceForecast has updated its Microsoft page multiple times, but its latest scenarios typically show the stock ending 2025 in the low‑$500s and finishing 2026 somewhere in the low‑ to mid‑$600s — often around $615–625, implying roughly +20% vs. current levels. [25]
LongForecast
- LongForecast (the “Economic Forecast Agency”) publishes month‑by‑month projections. One run of its model shows September–October 2026 averaging around $628–632, with end‑of‑month targets near $630–632. [26]
These sites don’t explain their models in much detail, and they’re not used by professional analysts. But they do have a common thread:
Most algorithmic models also place MSFT somewhere between the mid‑$500s and high‑$600s by late 2026.
That band isn’t far from Wall Street’s $600–700 cluster.
6. AI and Cloud: The Core Drivers of Microsoft’s 2026 Story
Any credible 2026 forecast has to grapple with one core fact:
Microsoft has become one of the most leveraged companies on planet Earth to the AI and cloud “supercycle.”
Explosive AI and Copilot adoption
Recent commentary around Q1 FY 2026 highlighted:
- 900 million monthly active users of AI features across Microsoft products
- Around 150 million monthly active users for first‑party Copilots
- Over 90% of the Fortune 500 using Microsoft 365 Copilot in some form
- Enterprise case studies like PwC, which has over 200,000 Copilot seats and tens of millions of recorded interactions, and healthcare usage where Dragon Copilot documented 17+ million patient encounters in a single quarter, up nearly 5x YoY. [27]
This “AI layer” sits on top of existing Office, Windows, security and developer products, making 2026 a key year for monetisation and seat expansion.
Azure, OpenAI and Anthropic
On the infrastructure side, Microsoft is building what amounts to a global AI supercomputer:
- Azure and other cloud services grew revenue ~40% YoY in Q1 FY 2026. [28]
- Microsoft plans to increase AI capacity by over 80% in FY 2026 and nearly double its data‑center footprint in two years, with huge projects like the Fairwater facility in Wisconsin. [29]
- A new agreement with OpenAI reportedly includes an incremental $250 billion of contracted Azure services over time — a staggering number that helps explain Microsoft’s massive capex. [30]
- In November 2025, Microsoft, Nvidia and Anthropic announced a three‑way partnership under which Anthropic committed around $30 billion of compute spend on Microsoft’s cloud, while Microsoft is set to invest up to $5 billion in Anthropic and scale its Claude models on Azure infrastructure. [31]
Earlier in 2025, Microsoft disclosed that Azure’s annualized public cloud revenue had surpassed $75B, with Azure revenue up ~39% YoY and total cloud revenue up 27% in that quarter. [32]
These numbers give Microsoft a multi‑year backlog of AI‑driven demand — exactly the kind of visibility that supports premium valuation multiples into 2026.
7. Big‑Picture Market Context: AI and the 2026 Bull Case
It’s not just Microsoft. Strategists at major banks are increasingly framing 2026 as an AI‑driven bull‑market year:
- Deutsche Bank projects the S&P 500 could reach 8,000 by end‑2026, about 21% above recent levels, explicitly citing booming earnings and AI‑related capital spending from mega‑caps like Microsoft and Nvidia. [33]
- A separate, aggressively bullish forecast for 2026 from JPMorgan highlights expected 13–15% annual earnings growth and an ongoing “AI supercycle” as reasons the index could even push beyond 8,000 in optimistic scenarios. [34]
If those macro AI‑supercycle views prove even directionally correct, Microsoft — arguably the single biggest software‑side winner of AI, based on CIO surveys and budget intentions — is well positioned to benefit. A recent Morgan Stanley survey of CIOs identified Microsoft as the top expected beneficiary of AI spending and cloud migration over the next three years, and the bank maintains an Overweight rating with a $625 price target. [35]
8. Scenario‑Based Microsoft Stock Price Forecast for 2026
Let’s pull together everything above into three broad scenarios for late 2026, using consensus earnings and reasonable P/E assumptions.
To keep things simple, we’ll:
- Use 2027 EPS as the main anchor for late‑2026 valuation (since markets usually look 12–18 months ahead).
- Take a consensus EPS 2027 estimate of about $18.7–18.9 per share. [36]
- Assume no major share‑count changes.
These are rough, illustrative ranges, not precise predictions.
1️⃣ Bearish 2026 scenario: high capex hangover, multiple compression
Assumptions
- AI and cloud growth remain solid but investors worry about peak AI spending or weaker macro.
- Microsoft continues to grow earnings, but the market re‑rates mega‑cap tech downward, compressing the P/E to about 28x 2027 EPS (a premium to the market, but below today’s mid‑30s).
Math (approximate)
- EPS 2027 ≈ $18.8
- P/E 28 → Price ≈ $525–530
In this scenario, Microsoft still trades slightly above today’s ~$492, but the upside is modest — and a deeper de‑rating (say to low‑20s P/E) could drag the stock into the mid‑$400s or lower despite healthy earnings growth.
2️⃣ Base 2026 scenario: steady AI adoption, premium multiple holds
Assumptions
- Azure and Copilot growth stay strong; OpenAI/Anthropic deals and RPO support visibility.
- Global growth is reasonable, and the AI investment supercycle is intact, but not euphoric.
- Investors are willing to pay around 32x 2027 EPS, roughly in line with Microsoft’s recent average AI‑era P/E.
Math (approximate)
- EPS 2027 ≈ $18.8
- P/E 32 → Price ≈ $600–605
That lines up well with the $625–635 average 12‑month price target range from major analyst aggregators and with many DCF/fair‑value models in the high‑$500s to low‑$600s. [37]
Base‑case takeaway: A mid‑$500s to low‑$600s Microsoft share price by late 2026 looks broadly consistent with current consensus.
3️⃣ Bullish 2026 scenario: AI flywheel and 5‑trillion narrative
Assumptions
- AI demand accelerates, and Microsoft continues to beat estimates, particularly in Azure AI and Copilots.
- Capacity bottlenecks ease, allowing more of the $392B+ RPO and giant OpenAI/Anthropic commitments to turn into revenue faster than expected. [38]
- Investors lean into the “$5 trillion club” story championed by analysts like Dan Ives and commentators at The Motley Fool. [39]
- Microsoft holds a 35–38x P/E on 2027 EPS — rich, but within the range seen at past AI peaks.
Math (approximate)
- EPS 2027 ≈ $18.8
- P/E 35 → Price ≈ $655–660
- P/E 38 → Price ≈ $710–715
This roughly matches the highest current Street targets in the $700+ zone and algorithmic projections that push MSFT into the high‑$600s or beyond by 2027–2030. [40]
Bull‑case takeaway: Late‑2026 MSFT in the mid‑$600s to low‑$700s would effectively price in Microsoft as a clear AI era winner on the way toward a potential $4.5–5+ trillion market cap later in the decade.
9. Key Risks That Could Derail the 2026 Outlook
Even the strongest bull thesis comes with serious risk factors:
- Azure growth slowdown or execution issues
Earlier in 2025, a weaker‑than‑expected non‑AI Azure performance and “execution issues” triggered a sharp MSFT sell‑off and target cuts from firms like UBS, despite overall optimism. [41] If similar disappointments recur, multiple compression could be swift. - Valuation risk and technical corrections
Despite earnings beats, MSFT has already seen pullbacks where the stock sold off on good news due to valuation concerns, temporarily breaking key moving averages. [42] In a risk‑off environment, a high‑30s P/E could become a liability. - Regulatory and antitrust pressure
Microsoft’s size and central role in AI (OpenAI stake, cloud dominance, Windows/Office ubiquity) make it a prime target for regulators worldwide. Aggressive remedies or restrictions could weigh on long‑term margins. - AI competition
Amazon, Google, Meta and a wave of open‑source AI ecosystems are fighting for the same dollars. Surveys suggest Microsoft is the top perceived AI winner among CIOs, but that leadership is not guaranteed forever. [43] - Macro and interest rates
The AI story is playing out against a macro backdrop of shifting interest rates and recession worries. If earnings growth slows or the AI spending boom is perceived as a bubble, multiples across megacap tech could compress.
10. What to Watch in 2025–2026
If you’re tracking Microsoft with a 2026 horizon in mind, some key metrics and milestones to watch are:
- Azure growth trend: Does Azure (and Azure AI) stay in the high‑20s to 40%+ growth band, or does it decelerate? [44]
- Copilot monetisation: Seat growth, average revenue per user, and attach rates across Microsoft 365, Dynamics, GitHub, and security products.
- AI capex vs. margins: Microsoft is spending tens of billions per year on AI infrastructure; the trajectory of operating margin vs. capex is crucial. [45]
- RPO and new AI deals: Changes in remaining performance obligations and big multi‑year AI contracts (especially with OpenAI, Anthropic and large enterprises). [46]
- Street estimate revisions: Upward or downward revisions to 2026–2027 EPS can quickly move price targets. [47]
11. Quick FAQ: Microsoft Stock Price Prediction 2026
What is the consensus Microsoft stock price forecast for 2026?
Most 12‑month Wall Street targets, which currently stretch into late 2026, cluster around $625–$635 per share, implying roughly 25–30% upside from around $492. Bullish targets reach $700+, while conservative targets sit near $500. [48]
What do models and algorithms say about MSFT in 2026?
Algorithmic sites like WalletInvestor, CoinPriceForecast and LongForecast typically place MSFT in the mid‑$500s to high‑$600s by the end of 2026, depending on the version of the model, broadly in line with many Street scenarios. [49]
Could Microsoft hit a $5 trillion valuation by 2026?
Most detailed analyses see $5 trillion as more of a “by 2028–2030” story than a strict 2026 base case, but several prominent voices — including Dan Ives and recent Motley Fool commentary — argue Microsoft has a clear path to $5T if AI earnings grow as expected and the P/E stays healthy. [50]
At a $5T market cap, depending on share count, MSFT would likely need a share price in roughly the high‑$600s to low‑$700s+, which is broadly consistent with the upper end of current 2026 bull‑case price targets.
Is Microsoft stock a buy right now?
Analysts overwhelmingly say yes — Microsoft carries a Strong Buy / Buy consensus almost everywhere you look. [51] But whether you should buy depends on your risk tolerance, time horizon, and portfolio needs. High‑quality doesn’t mean risk‑free, especially at premium valuations.
Bottom Line
Putting the pieces together:
- Earnings forecasts suggest Microsoft could earn close to $19 per share by 2027, with double‑digit revenue and EPS growth well into the AI decade. [52]
- Wall Street’s 12‑month targets, which now effectively span late 2026, center around $625–$635, with a wide but generally upward‑sloping range between $500 and $700+. [53]
- DCF and intrinsic‑value models often see fair value somewhere in the mid‑$500s to low‑$600s, suggesting Microsoft isn’t outrageously overvalued relative to its own growth and cash flows. [54]
- Algorithmic models and long‑term commentators frequently land in the mid‑$500s to high‑$600s for 2026, with some looking toward the $5 trillion club by the end of the decade. [55]
Given current information, a reasonable, non‑advice summary of Microsoft’s 2026 stock price outlook might be:
- Bearish band: roughly $450–$530 (multiple compression or AI disappointment)
- Base band: roughly $550–$625 (solid AI/cloud growth, stable premium P/E)
- Bullish band: roughly $650–$725 (AI super‑cycle, sustained beats, 5‑trillion narrative taking hold)
Where MSFT actually lands in 2026 will depend on factors no model can fully predict: AI adoption speed, macro conditions, competition, regulation and investor psychology.
But if AI and cloud remain the defining themes of this decade, it’s hard to imagine any serious 2026 stock market discussion that doesn’t put Microsoft very close to the center of the story.
References
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