Microsoft Earns A Rating Upgrade From Guggenheim Ahead Of Earnings

• Guggenheim gave a $586 price target, implying a 12% upside from Friday’s closing price.
• Analyst John DiFucci cited strong leadership, AI growth, and Azure’s subscription-based model as key drivers of future gains.
• Microsoft’s profitable Windows and Microsoft 365 businesses continue to offset Azure’s lower margins.

Microsoft Corp.(MSFT) received a major boost from Guggenheim, which upgraded the tech giant’s stock with a ‘Buy’ rating from ‘Neutral’ with a price target of $586 per share. 

According to a CNBC report, the new target implies about a 12% potential upside from Microsoft’s closing price on Friday.

AI, Cloud Growth Providing Thrust 

Analyst John DiFucci cited Microsoft’s durable business model and strong leadership as reasons for the upgrade, even while acknowledging that the stock’s valuation remains high. He described Microsoft as a “relatively low-risk” investment supported by its dominance in both operating systems and productivity software.

DiFucci pointed to the growth of Azure, Microsoft’s cloud computing platform, as a major driver of future gains. He highlighted Azure’s consumption-based model, which mirrors a subscription service and provides steady recurring revenue. 

The analyst said Azure remains one of the beneficiaries of the ongoing AI boom. Microsoft stock traded over 1% higher on Monday afternoon. On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory amid ‘normal’ message volume levels.

 Stable Core Business

Despite the stock’s high valuation, DiFucci said that Microsoft’s “margin-rich” businesses, such as Windows and Microsoft 365, help balance the impact of lower-margin segments like Azure. 

He added that Microsoft’s “boring is beautiful” approach underscores the stability of its Windows division, which remains highly profitable and often underestimated by investors.

The tech giant will report its fiscal 2026 first-quarter earnings after the closing bell on Wednesday. Analysts anticipate a revenue of $75.36 billion and an earnings per share (EPS) of $3.67, according to Fiscal AI data. 

Microsoft stock has gained over 24% in the last 12 months. 

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