Goldman Sachs increased its 12-month target price of Microsoft Corporation (NASDAQ: MSFT) to $550 from $480, based on higher optimism regarding the company’s artificial intelligence (AI) efforts and cloud services expansion.
AI Innovations Drive Optimism
Goldman Sachs analyst Kash Rangan, as cited in a CNBC report, emphasized two critical growth factors. First is GitHub Copilot, an AI assistant that writes, runs, and reviews code automatically. This tool has made software development more efficient and now supports over 15 million developers.
Second is the Azure AI Foundry, Microsoft’s platform for building AI solutions, which has rapidly gained users and processed over 100 trillion tokens in the last quarter. These innovations, along with tools like Copilot Studio—used by more than 230,000 organizations—highlight Microsoft’s deep integration of AI across its services.
Cloud Revenue Projections
Goldman Sachs expects Microsoft’s cloud business to surpass $300 billion in fiscal year 2029 as a result of growth in Azure services and the Azure AI Foundry platform, which in the previous quarter processed more than 100 trillion tokens.
According to reports, the stock has gained 8.9 percent year-to-date, with 56 of 63 analysts maintaining a “Buy” rating.
Market Performance and Analyst Consensus
As of May 20, Microsoft is listed at $458.87 per share with a market capitalization of about $2.79 trillion. The price-to-earnings ratio for the company stands at 28.88, and earnings per share at $12.93.
The company has risen by 8.9% year-to-date, with 56 out of 63 analysts giving it a “Buy” rating, which is an indicator of robust market optimism in Microsoft’s direction.
Goldman Sachs’ revised price target highlights the market’s optimism around Microsoft’s AI and cloud computing developments. The firm’s ongoing investment in such areas puts it in a good place for long-term growth in the changing tech space.
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