Microsoft (MSFT) stock has climbed over 45% in six months. The momentum behind this surge stems from its solid financial performance, driven by robust demand for its cloud and artificial intelligence (AI) solutions. Both these areas have become key growth engines for Microsoft’s business and are likely to drive MSFT’s long-term growth.
Microsoft Cloud generated over $168 billion in annual revenue in fiscal 2025, marking a 23% year-over-year increase. Within that, Azure generated more than $75 billion, representing a 34% increase. This growth reflects the expanding adoption of enterprises and rising demand across all types of workloads, from data storage to AI-powered computing.
The tech giant is rapidly building one of the most comprehensive AI product suites and infrastructure stacks in the industry, integrating AI across its platforms. It now operates more than 400 data centers in 70 regions worldwide, strengthening its ability to meet the increasing global demand for cloud and AI services.
With its dominant commercial cloud business, accelerating demand for cloud and AI-driven solutions, and a robust pipeline of long-term contracts, Wall Street’s sentiment toward the stock remains positive. Meanwhile, the highest price target for Microsoft stock is $680, suggesting potential upside of roughly 31% from its closing price of $517.35 on Oct. 3.
Microsoft’s growth trajectory remains solid as the tech giant continues to see solid demand for its cloud computing and AI solutions. Its commercial bookings surpassed the $100 billion mark during the last reported quarter, driven by robust contract renewals and an increase in multiple large-value deals, including several exceeding $10 million and even $100 million across Azure and Microsoft 365.
MSFT’s commercial remaining performance obligation (RPO), a forward-looking indicator of revenue, climbed to $368 billion in the last reported quarter, reflecting a 37% year-over-year increase. Notably, approximately 35% of this RPO is expected to translate into revenue over the next 12 months. Furthermore, the remainder is expected to be recognized in subsequent periods, indicating a stable revenue runway extending well into the future.