2025-11-07

Microsoft (NASDAQ: MSFT) Stock Price Prediction for 2025: Where Will It Be in 1 Year

Key Points in This Article:

Microsoft is dedicating significant capex to AI and cloud infrastructure in order to compete with other tech firms.
Microsoft’s gaming segment grew 44% last year, providing significant revenue to complement its software, cloud and AI business lines.
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Shares ofMicrosoft(NASDAQ:MSFT) gained 1.34% over the past five trading sessions after gaining 2.30% the five prior. That brings MSFT’s year-to-date gain to 25.39%, including a more than 48% gain since its year-to-date low on April 8. The company’s reported strong Q2 earnings on July 30. The Magnificent Seven mainstay reported EPS of $3.65 versus analysts’ expectations of $3.35, while quarterly revenue came in at $76.44 billion.

On Oct. 1, the company announced that it was increasing its Xbox Game Pass subscription by 50%. In its last fiscal year, Microsoft saw more than 8% of revenue derived from its gaming segment, which now boasts 50 million monthly active subscribers and nearly $5 billion in YoY revenue.

On June 5, it was reported that the company will be expanding its AI and cloud investments in Switzerland, committing $400 million to expand its data center infrastructure in the European nation. The additional capacity is expected to support more than 50,000 current customers and expand the availability of AI services for more sectors, including health care, finance government. Microsoft is capitalizing on its Azure platform’s momentum as revenue jumped 39% in FY25 Q4, driven by AI services.

Microsoft’s decision in May fire 6,000 employees — or 3% of its workforce — signals the tech giant is serious about cost discipline amid economic uncertainty. With analysts eyeing sustained cloud demand,24/7 Wall St.conducted analysis to explore whether Microsoft can maintain its upward trajectory and drive long-term growth.

Microsoft Corporation

NASDAQ:MSFT$513.43▲ $123.90(24.13%)1YPre-Market1D5D1M3M6M1Y5YMAX

KEY DATA POINTS−

Previous Close$513.57Market Cap3.88TDay's Range$510.00 - $517.1952wk Range$343.59 - $554.54Volume14.69MP/E Ratio38.33Gross Margin36.10%Dividend Yield0.63%ExchangeNASDAQ

Why Invest in Microsoft

Microsoft navigates challenges, but remains a prime investment due to its AI and cloud dominance. Third-quarter earnings showcased robust demand for its Intelligent Cloud segment, though tariff risks linger. Microsoft’s $80 billion cash reserve fuels its $80 billion investments in cloud and AI infrastructure, with over half in the U.S.

Its Microsoft 365 Copilot, adopted by over 70% of Fortune 500 firms, drives productivity revenue, positioning Microsoft to capture the AI market’s 37% compounded annual growth predicted through 2030. Similarly, partnerships withOracle(NYSE:ORCL)for multi-cloud solutions bolster its competitiveness againstAmazon‘s(NASDAQ:AMZN)AWS.

When Microsoft last reported earnings, EPS beat by 7.40% and revenue beat by 2.37%. The EPS beat marked the 15th time in the past 16 quarters that the company surpassed estimates, with EPS coming in at $3.46 versus the consensus forecast of $3.20.

Microsoft (MSFT) As a Company

Microsoft reported a gross profit of $49.8 billion, up 14% year-over-year, with gross margins at 68%, driven by strong cloud and AI demand. The company committed to continuing spending on capital expenditures, focusing on AI data center expansion to meet enterprise needs. Analysts expect Q4 capex to remain elevated at $16 billion to $17 billion to support Microsoft’s cloud infrastructure growth.

Tariff uncertainties do pose risks, even with the pause on China, as supply chain cost pressures for server hardware are not eliminated. Microsoft’s operating income of $32 billion was tempered by a 5% rise in operating expenses, reflecting heavy AI R&D investments. Despite no revenue from its $13 billion OpenAI stake, Microsoft reported $42.4 billion in Microsoft Cloud revenue, up 20% year-over-year.

Beyond cloud, Microsoft’s gaming segment grew 44% with 43 points of the gain coming from its acquisition of Activision, but bolstered by Xbox content and Bethesda’s Starfield expansion. A partnership with Oracle for multicloud solutions strengthens its enterprise offerings, further diversifying its revenue. Wall Street projects Q4 revenue of $73.8 billion, up 14%, driven by Microsoft’s AI and cloud momentum.

Microsoft As a Stock

Broadly, Wall Street analysts’ remain bullish, with 33 of 34 analysts covering MSFT assigning it a “Buy” rating, one assigning it a “Hold” rating and zero assigning it a “Sell” rating. Overall, the stock receives a consensus “Strong Buy” rating. Wall Street’s price targets cover a significant range, spanning $550 per share on the low end to $680 per share on the high end. The median one-year price target for MSFT is $626.78, which represents 20.60% potential upside from today’s share price.

Institutional ownership currently stands at 72.70%, with three of the four largest buy-side firms — Vanguard, BlackRock and State Street — holding a collective 1.570 billion shares of Microsoft.

Estimate	Price Target	%Change From Current Price
Low	$550	4.79%
Median	$628.05	19.66%
High	$680	29.56%

Microsoft (MSFT) Stock Prediction in 2025

Microsoft’s 39% Azure revenue growth in Q4 positions it for cloud and AI market gains. However, $20 billion quarterly capex and tariff risks require caution. Its $80 billion cash reserve and Oracle partnership offer stability, making MSFT stock a buy for growth investors, even as valuation concerns linger.

24/7 Wall St.’s year-end price target for Microsoft is $563.64, implying upside potential of 7.39% from the stock’s current price. This cautious target reflects Azure’s strength and FY26 Q1 revenue guidance, balanced against the need for higher capex spending and potential supply chain disruptions, positioning it at a realistic estimate of its leading presence in the space.

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