Microsoft concluded 2025 having transformed into an "AI-first" powerhouse. The company's stock gained approximately 16.5% for the year. This growth was primarily driven by a strategy centered on integrating AI through the Copilot ecosystem and expanding the Azure cloud infrastructure.
Trading was subdued on December 29, with the stock seeing little movement. Institutional investors appeared to protect gains heading into the new year.
Wall Street analysts maintain an overwhelmingly bullish outlook for 2026, issuing a consensus "Strong Buy" rating. Forecasts predict continued growth fueled by Azure’s dominance in the AI space and robust enterprise adoption of AI services. The average analyst price target suggests significant upside, with some targets reaching $700.
Despite the strong annual performance, reports note Microsoft’s stock slightly lagged the S&P 500. This comparative lag may present a buying opportunity for investors.