Over the course of the last 30 days, the price of Microsoft stock (NASDAQ: MSFT) has dropped by 7.71%. At press time, MSFT shares were trading at $401.05, marking a 4.85% loss on a year-to-date (YTD) basis.
On January 29, the company released its FY25 Q2 earnings report. Despite strong results on the whole, weaker-than-expected Azure revenue and high artificial intelligence (AI) capital expenditures fueled investor uncertainty, and the thus-prevailing pullback kicked off.
At present, the company seems to be slowing or delaying its data center leases, in a move that many market participants are deeming a bearish signal. In contrast, one Wall Street researcher has doubled down on his bullish outlook, going as far as to highlight this recent development as a positive one.
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Goldman Sachs sees a 24% upside in the cards for Microsoft stock
Goldman Sachs analyst Kash Rangan reiterated a prior ‘Buy’ rating on Microsoft stock and maintained a $500 price target on February 24. If met, Rangan’s price forecast would imply a 24.67% increase from current prices.
In a note shared with investors, the analyst highlighted that Goldman isn’t overly concerned with the recent news regarding data center leases. On the contrary, the investment bank sees this move as confirmation that the tech giant is a prudent spender, even in the middle of the AI gold rush.
As Gen-AI increasingly moves from the infrastructure layer to the platform and application layers, Rangan expects a reacceleration in earnings per share (EPS) growth. Lastly, the analyst noted that the $300 billion that the company has in remaining performance obligations (RPO), established AI position, and 75% year-over-year (YoY) growth in commercial bookings make it an attractive pick — particularly in comparison to rival and peer Oracle.
Should you buy MSFT shares?
At a forward price-to-earnings (PE) ratio of 27.02, Microsoft stock is relatively cheap, especially when compared to many other tech companies that are also poised to benefit from the AI boom.
Goldman Sachs is far from the only firm that is bullish on the well-established tech titan. In the immediate aftermath of the DeepSeek selloff, Karl Kierstead of UBS reaffirmed an earlier ‘Buy’ rating with a $525 price target.
As of early January, Wall Street analysts set an average price target of $505 for Microsoft stock. Despite several seemingly bearish developments, by press time on February 25, the average 12-month price forecast had shifted to $510 — a mark that implies a 27.18% upside.
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