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With a market cap of $3.5 trillion, Microsoft Corporation (MSFT) is a global technology company that develops and supports a wide range of software, cloud services, devices, and solutions across productivity, business, cloud computing, and personal computing. It delivers products and services such as Microsoft 365, Azure, Windows, LinkedIn, Dynamics, and Xbox through OEMs, partners, and digital and retail channels worldwide.
Shares of the Redmond, Washington-based company have lagged behind the broader market over the past 52 weeks. MSFT stock has increased 5.9% over this time frame, while the broader S&P 500 Index ($SPX) has gained 13.9%. Moreover, shares of Microsoft have declined 2.8% on a YTD basis, compared to SPX's 1.5% rise.
Looking closer, the software maker stock has also underperformed the State Street Technology Select Sector SPDR ETF's (XLK) return of 22.1% over the past 52 weeks.
Despite beating expectations with Q1 2026 adjusted EPS of $4.13 and revenue of $77.67 billion on Oct. 29, Microsoft’s shares fell 2.9% the next day Investors focused on profitability pressures from AI investments, notably $3.1 billion ($0.41 per share) in losses related to OpenAI that weighed on GAAP results.
For the fiscal year ending in June 2026, analysts expect MSFT's adjusted EPS to grow 16.4% year-over-year to $15.87. The company's earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 49 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 41 “Strong Buys,” five “Moderate Buy” ratings, and three “Holds.”
On Jan. 26, Raymond James reiterated a “Outperform” rating on MSFT stock with a $600 price target.
The mean price target of $621.87 represents a premium of 32.2% to MSFT's current price. The Street-high price target of $678 suggests a 44.2% potential upside.
