Microsoft’s Q4 results and the ensuing rally injected fresh life into the stock, which has lagged for most of this year.

  • Microsoft added about $750 billion to its market capitalization in the last three days.
  • Building on its recently announced plans to bring original Xbox games to PC, Microsoft is also reportedly planning to let developers bring their Xbox 360 games to PC as well. 
  • Stocktwits sentiment for MSFT was ‘extremely bullish,’ unchanged since its earnings report was issued last Tuesday.

Microsoft Corp.’s shares slipped marginally in overnight trading late Monday after a three-session rally that sent the stock soaring 25% to a nearly eight-month high, marking one of the market’s sharpest reversals in recent weeks.

The Windows-maker issued a remarkably strong quarterly report last week. Revenue increased 19% in the company’s fiscal fourth quarter, with Azure Cloud and other services’ sales climbing 43% – both were above Wall Street’s projections at the time.

AI-Fueled Rally Adds $750 Billion To Microsoft’s Value 

The post-results rally injected fresh life into the stock, which has lagged for most of this year. With strong results from fellow hyperscalers such as Alphabet and Amazon also reporting strong growth, momentum is building for Big Tech players amid a rotation in the tech market that kicked off last month.

Microsoft added about $750 billion to its market capitalization in the last three days and the stock price is at the widest gap from its 200-day moving average since last October, according to Barchart.

Microsoft May Bring Xbox 360 Games To PC

In latest news, Microsoft is reportedly planning to bring Xbox 360 games to personal computers, The Verge reported on Monday, citing a Microsoft memo to the developers.

Building on its recently announced plans to bring original Xbox games to PC, Microsoft is also planning to let developers bring their Xbox 360 games to PC as well. 

Xbox 360 games will be able to run on the next-gen Project Helix console, “Xbox PCs,” and handheld devices, according to the communication reviewed by The Verge.

Microsoft has already confirmed Helix will support PC gaming, and bringing older Xbox titles to PC expands a cross-device Xbox library while laying the groundwork for a future without disc drives. Developers will control pricing, backward compatibility and Game Pass availability for Xbox 360 games, with a gradual rollout across next-generation devices planned for 2027–2028.

Meanwhile, the full launch of original Xbox games on PC is slated for October 2026.

Microsoft’s Xbox unit went through a churn recently. Last month, Microsoft said it was cutting some 3,200 jobs in the unit, representing about one-fifth of the division’s total headcount, and selling or spinning off four game development studios and exploring strategic options for a fifth one.

Analysts, Retail Traders Optimistic After MSFT’s Q4 Report

Still, the post-results euphoria for Microsoft is widely intact. Several analysts, including Bernstein, Piper Sandler, and Barclays, raised their price targets on MSFT stock last week. 

On Monday, Goldman Sachs analysts added Microsoft to the firm's U.S. Conviction List as part of its monthly update, while keeping a ‘Buy’ rating on the shares with a $640 price target. 

Goldman said it believes Microsoft has an "ideal position" as AI moves from a trade focused on training and infrastructure to the early stages of "how to make AI work in enterprise."

Currently, 50 out of 56 analysts rate the stock ‘Buy’ or higher and the remaining three rate it ‘Hold,’ per Koyfin. Their average price target price target of $562.73 implies a 15% upside from the stock’s close on Monday

On Stocktwits, the retail sentiment for MSFT was ‘extremely bullish,’ unchanged since the company’s earnings report last Tuesday. 

“$MSFT $QQQ $SPY I think MSFT is a great company but this market is such a clown show. Can we not just rip these huge companies straight down or straight up 20% like it's nothing. MSFT is 10% above it's 8d-dma. The momentum in this market is all or nothing,” a trader wrote.

With the recent gains, Microsoft’s shares are up 1.3% year to date. In comparison, the Roundhill Magnificent Seven ETF (MAGS) is up 3.7% in this period.

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