Microsoft’s big spending plans are pressuring the stock, but analysts remain bullish on the tech giant. Shares were down around 2% after CFO Amy Hood said capital expenditures for fiscal 2026 would be above that of the previous year, as the company ramps up artificial intelligence investments. For the company’s fiscal first quarter, capex totaled $34.9 billion. Analysts also pointed to a slight miss in headline Azure growth as a soft spot. But overall, analysts maintained their overwhelmingly bullish stance on Microsoft. Many believe that this increased spending ahead is justified by the growing demand for Microsoft’s products. “While we acknowledge quarterly gyrations in Azure and other portions of the business, we see Microsoft’s fundamentals trending in the right direction,” wrote JPMorgan, which increased its price target on the stock following the report. Here’s what some of Wall Street’s biggest sell-side shops had to say on the report. JPMorgan: keeps overweight rating, increases price target to $575 from $565 The bank’s price target is 6% above where shares closed on Wednesday. “While we acknowledge quarterly gyrations in Azure and other portions of the business, we see Microsoft’s fundamentals trending in the right direction as Azure growth remains elevated, RPO and bookings-related metrics show particular strength, expectations for FY26 CapEx spending are revised up materially to support a potential doubling of data center footprint over the next two years, and a number of other subtly-positive developments are evident across the business.” Barclays: overweight rating, $625 price target The bank’s forecast corresponds to upside of around 15%. “Higher capex growth to match growing Azure demand the main message from Q1. In Q1, we got a solid P & L beat across the board but also higher capex (now over 58% YoY growth in FY26) without corresponding higher Azure growth guidance for Q2. This will likely be debated for investors. The issue here seems timing though, and hence we remain positive on the name.” Goldman Sachs: buy, $630 price target Goldman’s target calls for 16% upside going forward. “The weakness in the stock can be attributed to a few factors: 1) While Azure growth was very solid at +39% CC, F2Q26 guidance suggests a 2-point sequential deceleration, 2) CapEx was higher than we had estimated, coming in at $34.9Bn (incl. Finance Leases) vs. GSe of $31.0Bn, while the outlook for F26 CapEx (incl. Finance Leases) goes higher by $24Bn to an estimated $140Bn vs. our previous estimate of $116Bn, 3) Other Expenses attributable to equity ownership in OpenAI were much greater than expected at $3.1Bn vs. our $1.1Bn estimate, which brought GAAP EPS down to a very modest beat. We think these issues are relatively near-term and tactical, and we remain constructive on the stock.” Bank of America: buy, $640 Analyst Brad Sills’ forecast is 18% above Microsoft’s Wednesday close. “Our takeaway is that even with a supply chain constraints, Azure’s growth rate is comfortably in the high 30s. With the new OAI deal coming online as early as Q2FY26 and easing supply chain constraints into FY27, we see pathways to Azure growth reacceleration. … The Office business remains in the mid teens growth range. However, monetization/conversion of a growing copilot top of funnel base (150 million users) has potential to drive Office growth meaningfully higher as we move through FY26. … Reiterate Buy on our top pick and $640 PO as we continue to believe that Microsoft is well positioned to take advantage of the AI cycle.” UBS: buy, $650 Analyst Karl Keirstead’s price target was approximately 20% higher than UBS’ closing price. “Microsoft reported solid overall numbers (17% total c/c revs growth, strong GM, OM and cash flow upside), with the stock’s fade in the after-market a function of the lack of upside in Azure growth, which landed at 39% (the bogey had drifted up to ~40% over the last few weeks) with the guide for 37% landing in-line at best. The key take for us was why — net, we buy into Microsoft’s point that AI infra demand remains very strong but they could not stand up new data center capacity fast enough. We remain Buy-rated.” Morgan Stanley: overweight, $650 “In Q1 commercial bookings grew 111% YoY, cRPO grew 35% YoY and management spoke to accelerating demand trends. A focus on Azure growth 1 point shy of the expectations in a supply constrained environment seems to miss the point — growth is accelerating. We would be aggressive buyers on any pullbacks.” Citi: buy, $682 Citi’s target equates to 26% upside. “Microsoft delivered a strong start to FY26. While headline Azure growth of 39% Y/Ycc (2pts of upside) might have slightly missed elevated expectations of 40%, a robust commercial bookings performance (+111% Y/Y) led by additional OpenAI commitments and strong CapEx ($35Bn vs. $30Bn guidance) offer very strong forward-looking consumption readthroughs.”
