Microsoft Stock Slips Under $400 But Analysts’ Optimism Hasn’t Faded

Microsoft’s stock (NASDAQ:MSFT) ticked lower on Friday, with shares trading around $397.45 after an early pullback in the session. That slight dip puts the stock below recent highs but doesn’t appear to have shaken Wall Street’s overall confidence in the tech giant’s future.

Microsoft drops below $400, Wall Street keeps its positive view

Although the stock price sits under $400 and has shown some softness this year, analysts remain overwhelmingly optimistic about Microsoft’s long-term trajectory. Wall Street’s consensus rating for Microsoft stock is Strong Buy, with the average 12-month price target near $600, implying nearly 50% upside potential from current levels.

That optimism isn’t limited to the average target. Top analysts at firms like Piper Sandler and Mizuho have reiterated Buy ratings with targets at or above $600, citing sustained demand for cloud services and growth in AI-related offerings as key drivers.

The strong Buy stance is based on Microsoft’s dominant position in enterprise software and expanding adoption of AI tools such as Microsoft 365 Copilot. That being said, recent industry news suggests some caution among investors. Heavy capital expenditures related to AI infrastructure have pressured free cash flow and weighed on near-term sentiment.

It’s worth noting that Microsoft’s leadership in cloud and generative AI is widely cited as a reason to buy the stock on dips. Even with short-term volatility, analysts point to robust Azure growth and the company’s entrenched enterprise ecosystem as reasons the stock could rebound toward its target range.