Market Reaction to AI Infrastructure Concerns: The announcement regarding DeepSeek has led to a 15% drop in electrical stocks, with Bernstein analysts noting a potential long-term demand risk that could reduce earnings per share growth. Despite this, they maintain a positive outlook on the AI-driven capital expenditure cycle, projecting significant increases in hyperscaler investments through 2025.
Long-Term Growth and Investment Outlook: Bernstein highlights a robust long-term project pipeline for data centers, estimating $330 billion in the US and $770 billion globally, while near-term investments are expected to rise by 24%. They continue to favor electrical infrastructure stocks like Quanta Services and Schneider Electric, suggesting these will benefit from sustained demand despite recent market volatility.
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 451.140
Low
500.00
Averages
631.36
High
678.00
Current: 451.140
Low
500.00
Averages
631.36
High
678.00
Citi
Buy
downgrade
$690 -> $660
2026-01-21
New
Reason
Citi
Price Target
$690 -> $660
AI Analysis
2026-01-21
New
downgrade
Buy
Reason
Citi lowered the firm's price target on Microsoft to $660 from $690 and keeps a Buy rating on the shares. Citi's reseller survey and partner data points were "more mixed" into Microsoft's fiscal Q2 results, the analyst tells investors in a research note. Citi expects an Azure beat in Q2 but reduced estimates for Microsoft's non-Azure businesses on weaker PC forecasts. The stock remains a top mega-cap idea at Citi.
Rothschild & Co Redburn
Alex Haissl
Neutral
downgrade
$500 -> $450
2026-01-21
New
Reason
Rothschild & Co Redburn
Alex Haissl
Price Target
$500 -> $450
2026-01-21
New
downgrade
Neutral
Reason
Rothschild & Co Redburn analyst Alex Haissl lowered the firm's price target on Microsoft to $450 from $500 and keeps a Neutral rating on the shares.
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Mizuho
Outperform
to
NULL
downgrade
$640 -> $620
2026-01-21
New
Reason
Mizuho
Price Target
$640 -> $620
2026-01-21
New
downgrade
Outperform
to
NULL
Reason
Mizuho lowered the firm's price target on Microsoft to $620 from $640 and keeps an Outperform rating on the shares. The firm adjusted targets in large-cap software as part of a Q4 earnings preview. Channel checks were solid overall, with public cloud data points were "generally good" and AI adoption "very strong," the analyst tells investors in a research note. However, Mizuho says some of its checks noted more moderate budget flush activity than usual. In addition, growing investor concerns about AI disruption :continue to decimate many software company multiples," the firm contends. It cites recent multiple compression for the target cuts.
TD Cowen
Buy
downgrade
$655 -> $625
2026-01-20
New
Reason
TD Cowen
Price Target
$655 -> $625
2026-01-20
New
downgrade
Buy
Reason
TD Cowen lowered the firm's price target on Microsoft to $625 from $655 and keeps a Buy rating on the shares. The firm previewed its results and said checks suggest demand for GPU and CPU infrastructure is stable or strengthening, and they expect about 2 points of upside to their 37% cc Azure estimates. Cowen suspects lack of growth acceleration due to capacity constraints will keep shares range-bound NT, but they remain constructive on the company's position to serve AI workloads.
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
