Microsoft today
As of 04:00 PM ET
- 52 week range
- $344.79
▼
$555.45
- Dividend yield
- 0.65%
- P/E ratio
- 37.65
- Price target
- $618.97
Microsoft Corporation Nasdaq: MSFT And Nvidia company. Nasdaq: NVDA newly Announce the launch The world’s first GB300 supercomputer for OpenAI. MSFT stock is up more than 21% in 2025, but growth has slowed to just over 1% in the past three months. Investors are holding their breath as they grapple with the artificial intelligence (AI) build against the high valuation of many stocks, especially those in the technology sector.
But this announcement, which comes roughly two weeks before Microsoft’s next earnings report, should remind investors of the importance of owning the best stocks in their class, and why the highest price targets for MSFT stock may be too low.
Microsoft and NVIDIA are redefining the AI infrastructure race
The problem centers around what is referred to as the “monetization” of artificial intelligence. For investors of a certain age, this can be summed up with the phrase “We won’t get scammed again.”
The dot-com bubble of the late 1990s and early 2000s taught or reminded investors about the importance of fundamentals. Many investors have been hurt by companies that had a good story but no way to turn that story into sustainable revenue and/or profits.
At the time, Microsoft was already one of the most powerful technology companies in the world. However, the company, which was about 10 years old at the beginning of the dot-com era, did not receive the same attention as new entrants such as AOL, Yahoo, and Amazon. Nasdaq: AMZN.
This was despite Microsoft’s Internet Explorer becoming the de facto browser and helping propel the company to a market value of $600 billion by the turn of the century, a staggering sum at the time.
Then and now, many investors failed to appreciate how Microsoft would use its size and strong balance sheet to launch into markets that would define its growth over the next 20 years.
From dot-com lessons to monetizing artificial intelligence
A similar story is emerging regarding artificial intelligence. Microsoft is moving from AI hype to AI revenue. Copilot’s subscriptions to Office 365, GitHub, and Dynamics 365 have begun to expand, creating new recurring revenue streams.
With the GB300 supercomputer, Microsoft is deepening its integration with OpenAI. This ensures Microsoft gets priority access to the most advanced AI models and gives its ecosystem (Office, Azure, LinkedIn, and more) a unique competitive advantage.
The strategic role of Azure in the growth of AI at OpenAI
Microsoft announced tens of billions of dollars in capital spending to expand its global network of AI-ready data centers. This comes in response to the huge demand for computing power, especially high-speed computing (HSC) power, to train and deploy large language models (LLMs).
However, investors know that Microsoft is making these commitments from a position of strength. The company’s Azure platform is the backbone of OpenAI’s operations. The addition of GB300-powered clusters further strengthens its leadership in cloud AI infrastructure.
Capital spending that expands margins, not costs
The result is that as enterprise customers race to deploy generative AI workloads, Microsoft will capture a disproportionate share, similar to how Amazon’s AWS dominated the first wave of cloud adoption.
At the same time, the GB300 system is designed to deliver performance and efficiency, reduce training costs and improve compute utilization across Microsoft’s data center footprint. These gains should ultimately translate into higher cloud margins and long-term operating leverage as AI workloads increase.
The GB300 supercomputer bridges toward quantum driving
The GB300 architecture is designed for massive parallel processing, model training, and ultra-fast data processing. This makes it the pinnacle of classic (GPU-based) AI computing. However, it is also fundamental for hybrid systems that will mix classical and quantum computing in the near future.
Microsoft’s long-term quantum roadmap envisions a “quantum-classical hybrid cloud” where Azure seamlessly allocates workloads between GPUs, CPUs, and quantum processors. In this context, the GB300 platform becomes a transitional layer where quantum applications will first be tested and scaled.
Analysts see more upside as Microsoft strengthens its moat
Microsoft stock forecast today
$618.97
20.52% upModerate purchase
Based on 34 analyst ratings
| Current price | $513.58 |
|---|---|
| High expectations | $710.00 |
| Average expectations | $618.97 |
| Low expectations | $475.00 |
Microsoft stock forecast details
Analysts continue to be optimistic about MSFT stock. The consensus target price of $618.47 is about 20% above the stock’s October 15 closing price. However, several analysts increased their price targets for MSFT stock, including Wells Fargo, which raised its price target from $650 to $675. This is one of the first targets to break above $650, but it likely won’t be the last.
With a price-to-earnings (P/E) ratio of about 37 times earnings, Microsoft is trading at a premium to the market and its historical average. However, investors were willing to pay that premium for the company’s double-digit earnings growth, which is expected to continue over the next 12 months.
These earnings highlight the tech giant’s strong free cash flow and strong balance sheet. This was all in place before the company started turning AI-driven revenue into tangible profits. This means that if a company gives a bullish earnings report, analysts may decide that the company’s multiple is not only not justified, but may be too low compared to the company’s long-term potential.
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