Truist Securities Keeps Buy Rating on Microsoft and Increases Price Target to $675
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 18 2025
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Should l Buy MSFT?
Source: Benzinga
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 401.840
Low
500.00
Averages
631.36
High
678.00
Current: 401.840
Low
500.00
Averages
631.36
High
678.00
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.
Microsoft's Copilot User Growth and Market Potential
- User Growth Data: Microsoft revealed that Copilot reached 15 million paying users in its latest earnings call, reflecting a 160% year-over-year growth, although this figure appears small compared to its 450 million Microsoft 365 paid users, indicating potential market demand.
- Market Competition Analysis: While Copilot's conversion rate stands at approximately 3.3%, lower than ChatGPT's 5%, Microsoft's existing user base provides a solid opportunity for future growth through cross-selling, especially as AI tools become more mainstream.
- Revenue Potential Outlook: Should Microsoft achieve another 160% growth in users over the next year, it could generate an additional $8.6 billion in revenue, which represents nearly 3% of its projected $328 billion revenue for fiscal year 2026, highlighting Copilot's commercial value.
- Strategic Positioning and Competitive Advantage: With significant equity stakes in both OpenAI and Anthropic, Microsoft can leverage AI to enhance Microsoft 365's competitiveness, thereby maintaining its leadership in the office software market and mitigating competitive pressures in the future.
See More
Microsoft Faces Intensifying Competition in Cloud Computing
- Cloud Competition: Microsoft faces fierce competition in the cloud computing sector from Amazon and Alphabet, with Azure's revenue growth of 39% lagging behind Google Cloud's 48%, indicating market share pressures.
- Rising Infrastructure Costs: The company's increasing infrastructure costs have raised concerns among investors, as CFO Amy Hood noted a direct correlation between capital expenditures and Azure's revenue, potentially impacting future returns on investment.
- Stock Valuation Decline: Microsoft's price-to-earnings (P/E) ratio has fallen to 25, nearing its lowest level in three years, reflecting market caution regarding its growth prospects, despite analysts' price target of $596 suggesting a 48% upside.
- Investor Sentiment Weakens: Following the earnings report on January 28, Microsoft's stock has dropped 16%, leading to investor doubts about the returns from its AI infrastructure investments, although the low valuation may present a buying opportunity in the long run.
See More
Investment Opportunities in Tech Giants' Stocks
- Microsoft's Strong Performance: In Q2 FY 2026, Microsoft reported a 17% year-over-year revenue increase and a 23% rise in non-GAAP net income, and despite the market's tepid response, the stock trades at a forward P/E of 24, indicating long-term investment potential.
- Google Cloud Surge: Alphabet's Google Cloud achieved a remarkable 48% year-over-year growth in its latest earnings report, alongside a 17% increase in its legacy search business, and despite market concerns over its AI spending plans, the strong demand suggests it remains a solid investment at a 27 times forward P/E.
- Amazon's Advertising and Cloud Strength: Amazon's overall revenue grew by 14%, with AWS and advertising segments rising by 23%, and although the stock has dipped due to market worries over its $200 billion capital expenditure plan, it still presents a buying opportunity at a forward P/E of 26.
- Capital Expenditure Plans Raise Concerns: All three companies plan significant capital expenditures in 2026, with Microsoft at $37.5 billion, Amazon at $200 billion, and Alphabet between $175-185 billion, and while the market reacts negatively to these plans, AI investments are deemed essential for future growth, maintaining an optimistic long-term outlook.
See More
2026 Portfolio Reset Strategies Amid Market Volatility
- Alphabet Cloud Growth: Despite a 11% decline in Alphabet's (GOOG) stock since early February, its cloud computing segment grew 48% year-over-year in Q4 2025, with operating profits up 53%, indicating strong potential in AI and expected sustained growth in the coming quarters.
- Search Business Stability: Alphabet's search business remains robust amid economic uncertainty, with Google Services' operating income increasing by 22% last quarter, demonstrating that its core business continues to be a strong cash flow source supporting future investments.
- SoFi Customer Growth: SoFi Technologies (SOFI) has surpassed 13.6 million customers, an 8% increase from Q3, reflecting the success of its online banking model in a digital environment, even as its stock has fallen nearly 40% from its November peak.
- Analyst Optimism: Despite waning market confidence in SoFi, analysts maintain a consensus price target of $26.94, representing a 37% upside from current levels, indicating recognition of its future growth potential and an anticipated stock rebound soon.
See More
Analysis of Nvidia's Recent Stock Underperformance
- Strong Financial Performance: Despite Nvidia's (NVDA) 2% year-to-date stock decline, its latest earnings report indicates accelerating revenue growth in Q3, with strong guidance for Q4, suggesting robust market demand in the AI sector that could drive future sales growth.
- Giant Investment Plans: Tech giants like Amazon, Alphabet, and Microsoft have announced massive AI investments, with Amazon planning to spend around $200 billion despite only $11.2 billion in trailing twelve-month free cash flow, raising concerns about sustainability while potentially boosting Nvidia's sales in the short term.
- In-House Chip Programs Rising: Amazon's Trainium2 AI chip business is generating over $10 billion in annual revenue and is fully subscribed, indicating that competitors are rapidly developing their own chip solutions, which could erode Nvidia's market share, especially as price competition intensifies.
- Valuation Pressure: Nvidia's current P/E ratio stands at 45, with a forward P/E of 24; while the company is experiencing rapid earnings growth, any slowdown in AI chip demand or the emergence of lower-cost alternatives from competitors could pressure Nvidia's pricing power and margins, leading to further stock price declines.
See More
Investor Fears of Bear Market Intensify
- Shift in Market Sentiment: Since 2022, investor fears of a bear market have intensified, with value, dividend, and international stocks emerging as leaders despite the S&P 500 being virtually flat in 2026, indicating a structural shift in market dynamics.
- Economic Growth Expectations: Concerns about the job market, affordability, and tariff impacts exist, yet expectations for GDP and earnings growth, along with stable inflation, have not raised urgent red flags for the markets, suggesting a wait-and-see approach.
- Investment Strategy Adjustments: Vanguard ETFs offer three strategies to mitigate potential bear market risks, including the Short-Term Treasury ETF (VGSH), which provides a 3.6% yield, ensuring a safe income stream while minimizing volatility.
- Defensive Equity Allocation: The Vanguard U.S. Minimum Volatility ETF (VFMV) helps investors reduce downside risk by investing in stocks expected to exhibit lower volatility, maintaining equity exposure while currently holding significant allocations in technology, industrials, consumer discretionary, and financials.
See More
Microsoft's Copilot User Growth and Market Potential
- User Growth Data: Microsoft revealed that Copilot reached 15 million paying users in its latest earnings call, reflecting a 160% year-over-year growth, although this figure appears small compared to its 450 million Microsoft 365 paid users, indicating potential market demand.
- Market Competition Analysis: While Copilot's conversion rate stands at approximately 3.3%, lower than ChatGPT's 5%, Microsoft's existing user base provides a solid opportunity for future growth through cross-selling, especially as AI tools become more mainstream.
- Revenue Potential Outlook: Should Microsoft achieve another 160% growth in users over the next year, it could generate an additional $8.6 billion in revenue, which represents nearly 3% of its projected $328 billion revenue for fiscal year 2026, highlighting Copilot's commercial value.
- Strategic Positioning and Competitive Advantage: With significant equity stakes in both OpenAI and Anthropic, Microsoft can leverage AI to enhance Microsoft 365's competitiveness, thereby maintaining its leadership in the office software market and mitigating competitive pressures in the future.
See More
Microsoft Faces Intensifying Competition in Cloud Computing
- Cloud Competition: Microsoft faces fierce competition in the cloud computing sector from Amazon and Alphabet, with Azure's revenue growth of 39% lagging behind Google Cloud's 48%, indicating market share pressures.
- Rising Infrastructure Costs: The company's increasing infrastructure costs have raised concerns among investors, as CFO Amy Hood noted a direct correlation between capital expenditures and Azure's revenue, potentially impacting future returns on investment.
- Stock Valuation Decline: Microsoft's price-to-earnings (P/E) ratio has fallen to 25, nearing its lowest level in three years, reflecting market caution regarding its growth prospects, despite analysts' price target of $596 suggesting a 48% upside.
- Investor Sentiment Weakens: Following the earnings report on January 28, Microsoft's stock has dropped 16%, leading to investor doubts about the returns from its AI infrastructure investments, although the low valuation may present a buying opportunity in the long run.
See More
Investment Opportunities in Tech Giants' Stocks
- Microsoft's Strong Performance: In Q2 FY 2026, Microsoft reported a 17% year-over-year revenue increase and a 23% rise in non-GAAP net income, and despite the market's tepid response, the stock trades at a forward P/E of 24, indicating long-term investment potential.
- Google Cloud Surge: Alphabet's Google Cloud achieved a remarkable 48% year-over-year growth in its latest earnings report, alongside a 17% increase in its legacy search business, and despite market concerns over its AI spending plans, the strong demand suggests it remains a solid investment at a 27 times forward P/E.
- Amazon's Advertising and Cloud Strength: Amazon's overall revenue grew by 14%, with AWS and advertising segments rising by 23%, and although the stock has dipped due to market worries over its $200 billion capital expenditure plan, it still presents a buying opportunity at a forward P/E of 26.
- Capital Expenditure Plans Raise Concerns: All three companies plan significant capital expenditures in 2026, with Microsoft at $37.5 billion, Amazon at $200 billion, and Alphabet between $175-185 billion, and while the market reacts negatively to these plans, AI investments are deemed essential for future growth, maintaining an optimistic long-term outlook.
See More
2026 Portfolio Reset Strategies Amid Market Volatility
- Alphabet Cloud Growth: Despite a 11% decline in Alphabet's (GOOG) stock since early February, its cloud computing segment grew 48% year-over-year in Q4 2025, with operating profits up 53%, indicating strong potential in AI and expected sustained growth in the coming quarters.
- Search Business Stability: Alphabet's search business remains robust amid economic uncertainty, with Google Services' operating income increasing by 22% last quarter, demonstrating that its core business continues to be a strong cash flow source supporting future investments.
- SoFi Customer Growth: SoFi Technologies (SOFI) has surpassed 13.6 million customers, an 8% increase from Q3, reflecting the success of its online banking model in a digital environment, even as its stock has fallen nearly 40% from its November peak.
- Analyst Optimism: Despite waning market confidence in SoFi, analysts maintain a consensus price target of $26.94, representing a 37% upside from current levels, indicating recognition of its future growth potential and an anticipated stock rebound soon.
See More
Analysis of Nvidia's Recent Stock Underperformance
- Strong Financial Performance: Despite Nvidia's (NVDA) 2% year-to-date stock decline, its latest earnings report indicates accelerating revenue growth in Q3, with strong guidance for Q4, suggesting robust market demand in the AI sector that could drive future sales growth.
- Giant Investment Plans: Tech giants like Amazon, Alphabet, and Microsoft have announced massive AI investments, with Amazon planning to spend around $200 billion despite only $11.2 billion in trailing twelve-month free cash flow, raising concerns about sustainability while potentially boosting Nvidia's sales in the short term.
- In-House Chip Programs Rising: Amazon's Trainium2 AI chip business is generating over $10 billion in annual revenue and is fully subscribed, indicating that competitors are rapidly developing their own chip solutions, which could erode Nvidia's market share, especially as price competition intensifies.
- Valuation Pressure: Nvidia's current P/E ratio stands at 45, with a forward P/E of 24; while the company is experiencing rapid earnings growth, any slowdown in AI chip demand or the emergence of lower-cost alternatives from competitors could pressure Nvidia's pricing power and margins, leading to further stock price declines.
See More
Investor Fears of Bear Market Intensify
- Shift in Market Sentiment: Since 2022, investor fears of a bear market have intensified, with value, dividend, and international stocks emerging as leaders despite the S&P 500 being virtually flat in 2026, indicating a structural shift in market dynamics.
- Economic Growth Expectations: Concerns about the job market, affordability, and tariff impacts exist, yet expectations for GDP and earnings growth, along with stable inflation, have not raised urgent red flags for the markets, suggesting a wait-and-see approach.
- Investment Strategy Adjustments: Vanguard ETFs offer three strategies to mitigate potential bear market risks, including the Short-Term Treasury ETF (VGSH), which provides a 3.6% yield, ensuring a safe income stream while minimizing volatility.
- Defensive Equity Allocation: The Vanguard U.S. Minimum Volatility ETF (VFMV) helps investors reduce downside risk by investing in stocks expected to exhibit lower volatility, maintaining equity exposure while currently holding significant allocations in technology, industrials, consumer discretionary, and financials.
See More
