UBS raised its price target on Microsoft to $675 from $525, keeping a Buy rating, days before the company's Oct. 28 earnings report.
The move landed in the middle of a rough stretch for technology shares. US tech shed more than $1T in market value on Oct. 16, with the Nasdaq 100 selling off 2.5% and sitting ~7% below its record high. Brent crude pushed past $110 per barrel the same day.
UBS analyst Karl Keirstead argued that stronger Azure and Microsoft 365 fundamentals justify higher earnings expectations. The bank also forecasts $900B in AI-related spending across the industry in 2026.
Three other firms moved in the same direction. TD Cowen went to $625 from $540, flagging potential for a higher-than-normal beat on Azure. Citi analyst Tyler Radke lifted his target to $636 from $600. Jefferies raised its number to $650 from $575, calling the valuation still compelling and naming Microsoft and Alphabet its favorites into year-end.
JPMorgan analyst Samik Chatterjee reaffirmed a $625 target and Buy rating on Oct. 13. Consensus across 37 analysts sits at $588.56, below most of the fresh numbers.
Microsoft price targets, October 2026
As of October 2026
| Firm | New Price Target (USD) | Prior Price Target (USD) | Rating |
|---|---|---|---|
| UBS | $675 | $525 | Buy |
| Jefferies | $650 | $575 | Buy |
| Citi | $636 | $600 | - |
| J.P. Morgan | $625 | Reaffirmed | Buy |
| TD Cowen | $625 | $540 | - |
| Analyst consensus (37) | $588.56 | - | - |
Investors are questioning the AI payoff
Microsoft Cloud revenue rose 27% to $59.3B in the prior quarter, with Azure up 43%. The company's price-to-earnings ratio stood at 30.29 on Oct. 14.
The bull case rests on Microsoft turning heavy AI infrastructure spending into paying customers, and capital expenditure remains a live concern for investors.
AI stocks cratered on worries about profitability and the timing of debt repayment, while hotter-than-expected inflation reports showed pressures extending beyond energy.
Analyst Dennis Dick said money is rotating out of the crowded AI trade into value names. Microsoft's fiscal first-quarter report on Oct. 28 will test whether enterprise AI demand holds up against the spending bill.
