Microsoft Shares Reach Record Peak before Q4, with Wall Street Believing there's Further Potential for MSFT Growth
Microsoft's stock is gearing up for potential growth following its Q4 earnings announcement on July 30, 2025. The tech giant's strong performance in cloud services and generative AI solutions has analysts confident about the company's future prospects.
According to recent reports, the consensus one-year price target for Microsoft stock is around $522.26 to $550.63, suggesting an upside of about 4.7% to 8.8% from current levels. Some analysts, however, have more optimistic targets, up to $613, indicating a potential upside as high as 21%.
Microsoft's Q4 earnings expectations include EPS growth of approximately 13.6% year-over-year to around $3.35. The strong revenue growth is driven by AI and cloud services, with the company's Azure sales showing a 39% increase in the previous quarter, beating analyst expectations. Azure is projected to sustain a 37% growth rate in the coming quarter.
The Microsoft Productivity and Business Processes segment anticipates revenue between $32.05 billion and $32.35 billion in the fourth quarter, representing double-digit growth. Enterprise and partner services are projected to grow in the mid to high single digits.
Steady demand for Microsoft 365 (M365) Commercial cloud services is expected to support this growth, with revenue in this category projected to rise around 14%. The Intelligent Cloud segment is projected to generate revenue between $28.75 billion and $29.05 billion, up 20% to 22% in constant currency.
Microsoft's AI-related revenue is also growing steadily. In the More Personal Computing segment, Search and news advertising revenue growth is expected in the mid to high teens. Azure revenue in the cloud platform is anticipated to rise 34% to 35%. Notably, AI services within Azure are expanding faster than non-AI services.
The company is aggressively expanding its infrastructure to meet the rising demand for its cloud and AI services. The on-premises server business, however, is expected to decline in the mid-single digits.
Xbox content and services are projected to grow in the high single digits. Wall Street has a consensus rating of "Strong Buy" for MSFT stock ahead of Q4 earnings, with one of the highest price targets on the Street for MSFT stock being $626, suggesting a potential 22% increase from its current price.
Microsoft's stock has already reached a record high of $518.29 on July 25, 2025, highlighting strong investor sentiment and signaling robust growth expectations following its earnings beat. The company's strong demand for cloud and artificial intelligence (AI) offerings has contributed to this recent rally.
In Q3, Microsoft Cloud brought in more than $42 billion in revenue, representing a 22% increase. As Microsoft continues to innovate and expand its offerings in the cloud and AI sectors, analysts remain confident that there is still room for upside in Microsoft's stock.
- Given the strong performance in cloud services and generative AI solutions, some analysts have set optimistic price targets for Microsoft stock, with one prediction reaching as high as $626, indicating a potential upside of 22%.
- Microsoft's AI-related revenue is growing steadily, with AI services within Azure expanding faster than non-AI services, suggesting potential investment opportunities in technology and artificial-intelligence related sectors.
