Stifel upgraded Microsoft to buy from hold and raised its price target to $575, citing renewed confidence in Azure's growth after the company's July earnings report. The move ends months of Wall Street caution, with 68 analysts, or roughly 96% of those covering the stock, now recommending buying it.
Stifel raises price target to $575
Stifel upgraded Microsoft to buy from hold on Tuesday, reversing a cautious downgrade from February. Shares gained 1.3% Wednesday on the news. Analyst Brad Reback raised his price target to $575 from $530, implying nearly 16% upside from Microsoft's Tuesday close of $498.
Reback cited greater confidence that Microsoft can sustain mid to upper teens revenue growth as advances in open weight AI models support its model agnostic strategy. The upgrade leaves few major Wall Street firms still cautious on the stock: Bloomberg data showed 68 analysts, or roughly 96% of those covering it, recommend buying, while three maintain hold ratings and none recommend selling.
A reversal after a weak year
That optimism contrasts with Microsoft's performance so far in 2026. Shares are up less than 5% this year, compared with a roughly 21% gain for the Nasdaq 100, making Microsoft one of the weakest performers among the Magnificent Seven. Investor concern had centered on the company's heavy AI infrastructure spending and the risk that generative AI could erode its legacy software businesses.
Those concerns eased after Microsoft's July earnings. Revenue rose 18% to $90 billion, while Microsoft Cloud revenue increased 27% to $59.3 billion. Azure and other cloud services revenue jumped 43%. The report triggered Microsoft's largest one-day market value gain on record, as investors responded to evidence that its AI and cloud spending was translating into stronger growth.
According to Stifel, the earnings report showed Microsoft had "clearly turned the corner," with operating efficiencies, strong cash generation and continued cloud growth supporting the firm's more bullish outlook.
Sources: MarketWatch (snippet-based), Crypto Briefing
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