What Happened?
Shares of technology giant Microsoft (NASDAQ: MSFT) jumped 4% in the afternoon session after a UBS analyst reiterated a Buy rating with a $600 price target.
The analyst argued that "continued ramp of the big Fairwater AI data centers in both Atlanta (which went live in October) and Wisconsin (going live in 1Q26)" are "key near-term catalysts for Microsoft Azure growth."
Adding to the positive sentiment, the company announced a multiyear partnership with the Mercedes-AMG PETRONAS F1 Team to use the company's cloud and enterprise AI technologies. The collaboration was set to place Microsoft Azure and AI at the center of the racing team's operations, from the factory to the track, for simulation, performance analysis, and race strategy. This news arrived at a time when investors were looking for signs that Microsoft's investments in AI and cloud expansion were translating into tangible results. The partnership provided a high-profile example of its technology in action.
After the initial pop the shares cooled down to $468.77, up 3.8% from previous close.
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What Is The Market Telling Us
Microsoft’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 10.4% on the news that the company reported strong first-quarter 2025 results, with revenue and operating income both beating Wall Street estimates, driven by surging demand for cloud and AI services, signaling resilient enterprise spend amid broader tech budget scrutiny.
Sales rose 13%, supported by broad-based strength across all business segments. While Productivity and Business Processes grew 10% and More Personal Computing rose 6%, the standout performance in Azure tipped the scales, thanks to increased customer adoption of AI workloads and infrastructure.
The bottom line was equally strong. Operating income climbed 16%, outpacing revenue growth, with operating margins expanding across all three segments. This margin strength helped boost net income, pushing earnings past analysts' estimates. Overall, this was a solid quarter with key areas of upside.
Microsoft is flat since the beginning of the year, and at $468.77 per share, it is trading 13.5% below its 52-week high of $542.07 from October 2025. Investors who bought $1,000 worth of Microsoft’s shares 5 years ago would now be looking at an investment worth $2,042.
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