Microsoft (NASDAQ: MSFT) is surfing the AI wave and leading the charge, and the stock’s 31% surge over the past three months proves it. While the S&P 500 has climbed 11% and the NASDAQ Composite is up 16%, Microsoft has left them in the dust. A one-two punch of explosive AI integration and relentless cloud momentum, especially through Azure, is to blame for this.
Here’s why Wall Street’s biggest bulls believe Microsoft could be headed toward a $4–$5 trillion valuation, and why investors might want to buckle in for the long haul.
AI + Cloud = Market-Crushing Growth
Microsoft’s strength is in its hype and its numbers. In Q3 2025, the company reported $70.07 billion in revenue, beating consensus by over $1.6 billion. Cloud revenue alone hit $42.4 billion, rising 20% YoY, while Azure and related services soared 33%, the kind of growth that screams scale and staying power.
Meanwhile, earnings per share hit $3.46, which beats the Street’s $3.22 estimate. And MSFT is now flirting with its 52-week high of $501, closing June with a whopping 12.44% YTD gain.
Wall Street is Incredibly Bullish
Citigroup sees the stock hitting $605, and the average target from Morgan Stanley, Wedbush, and Wells Fargo? $571.67, which is a super solid 15% upside from current levels.
TD Cowen and Bank of America have declared Microsoft the undisputed AI leader in both infrastructure and applications. Meanwhile, Goldman Sachs’ analyst Kash Rangan believes Microsoft Cloud revenue will more than double to $300B by 2029, with tiered AI pricing models (like Copilot and Dynamics AI) giving Microsoft room to scale profitably.
And Dan Ives of Wedbush? He’s calling for a $4 trillion valuation this summer, and $5 trillion within 18 months. His reason is that Microsoft isn’t just building AI tools; it is laying the groundwork for the entire AI economy.
But here’s the wrinkle: OpenAI wants more independence. Microsoft’s sweetheart deal, where it scooped up 20% of OpenAI’s revenue is reportedly being renegotiated down to 10% by 2030.
Still, Microsoft’s deep integration of OpenAI’s models across Azure, Windows, Office, and GitHub ensures it will remain the distribution king of enterprise AI, regardless of who’s in the driver’s seat at OpenAI HQ.
