July 25 – Microsoft (NASDAQ:MSFT) gears up for its Q4 earnings on July 30, and expectations are soaring. Wedbush analyst Dan Ives says the tech giant is firing on all cylinders, likening it to golf world No.1 Scottie Scheffler, a nod to consistency and dominance.
The buzz surrounds Microsoft’s cloud momentum and aggressive AI strategy. Over the past year, Microsoft has invested heavily in data center expansion, earmarking $80 billion in capital spending for fiscal 2025. Analysts believe this will fuel long-term AI growth, potentially unlocking $25 billion in additional revenue by 2026.
Despite recent layoffs that drew political criticism, Microsoft continues to double down on talent. It recently hired around two dozen employees from Alphabet’s (NASDAQ:GOOGL) DeepMind unit, reinforcing its leadership in the enterprise AI race.
Ives expects more than 70% of Microsoft’s user base to adopt AI features in the next three years and sees its valuation hitting $4 trillion this summer, with room to reach $5 trillion by 2026, joining NVIDIA (NASDAQ:NVDA) in elite territory.
Microsoft Could Hit $4 Trillion Soon as AI and Cloud Spending Reach New Heights
Based on the one year price targets offered by 50 analysts, the average target price for Microsoft Corp is $540.05 with a high estimate of $650.00 and a low estimate of $423.00. The average target implies a upside of +5.71% from the current price of $510.88.
Based on GuruFocus estimates, the estimated GF Value for Microsoft Corp in one year is $511.57, suggesting a upside of +0.14% from the current price of $510.88.
This article first appeared on GuruFocus.