Everyone knows Microsoft (NASDAQ: MSFT) and its best-known products, including the Windows operating system and Microsoft 365 suite of productivity apps, but its growing cloud computing platform, Azure, is the future of the company.

Microsoft stock has been a millionaire maker for decades, with a stock split-adjusted IPO price of $0.14, which means at today’s stock price of $433.70, the stock is up 445634.84%. That would have turned a $1000 investment at Microsoft’s IPO into $4.46 million today.

As one of the most valuable companies in the world, the only thing investors focus on is what the stock will do over the coming years. Wall Street analysts only go as far as 1 year out when giving a stock prediction. But long-term investors want to know where Microsoft might be several years down the road.

24/7 Wall Street aims to give you our assumptions on the stock and provide our insights around the numbers coming from Microsoft and which markets the company is operating in that are most exciting to us.

Key Points in this Article:

• Key growth drivers: Azure cloud services, productivity software, and LinkedIn dominate Microsoft’s future potential.
• Microsoft’s acquisition of Activision boosts its gaming segment, enhancing its competitive edge in the personal computing market.
• If you’re looking for an AI stock early in the AI growth cycle, grab a complimentary copy of our “The Next NVIDIA” report. It has a software stock that could ride dominance in AI to returns of 10X or more.

Recent Microsoft Stock Updates and News

12/24/2024

To broaden its AI technology base and potentially reduce costs, Microsoft is integrating both its internally developed AI models and those from other companies into its flagship AI product, Microsoft 265 Copilot. This shift marks a departure from Microsoft’s previous heavy reliance on OpenAI’s technology, despite being a major investor in the company.

12/20/2024

UBS has raised its price target for Microsoft to $525, maintaining a “Buy” rating.

12/19/2024

Microsoft has teamed up with QTS Realty Trust LLC to build seven new data centers in Dallas, Texas. The Irving City Council has given the green light to separate incentive packages for each company’s project. Microsoft plans to construct four of these seven data centers.  In exchange, the city of Irving will provide a major tax break, reducing property taxes by 50% if Microsoft qualifies.

12/18/2024

Stifel Nicolaus has adjusted its price target for Microsoft from $475.00 to $515.00, maintaining a “buy” rating.

12/16/2024

Last October, Amazon announced a five-year, $1 billion deal with Microsoft to provide 1.5 million employees with Microsoft 265 tools like Word, Excel, and Outlook. However, due to a recent cyberattack, believed to be linked to Russia, Amazon is delaying the deployment of the deal.

12/13/2024

Microsoft shareholders recently rejected a proposal urging the company to assess the risks of its AI technologies being used in the fossil fuel industry. The proposal sought to have Microsoft investigate the potential dangers of using its AI in projects that significantly contribute to carbon emissions.

12/11/2024

Google has petitioned the U.S. Federal Trade Commission (FTC) to intervene in Microsoft’s exclusive partnership with OpenAI. Google argues that this exclusive deal could stifle competition and give Microsoft an unfair advantage in the readily revolving AI landscape. Microsoft, in contrast, is accusing the FTC of improperly leaking confidential information related to its ongoing antitrust investigation. The company has formally requested an investigation into these alleged attacks.

12/10/2024

Microsoft shareholders have voted against NCPPR’s recent proposal and will not explore investing in Bitcoin. Microsoft already has established processes in place to manage and diversify its treasury for the long-term benefit of its shareholders, and thus the company deemed a public assessment of Bitcoin investment to be necessary.

12/9/2024

Microsoft shareholders will vote tomorrow on a proposal to publically assess adding Bitcoin to the company’s balance sheet. The vote comes as Bitcoin trades around $98,050, having recently hit a record high. The proposal was submitted by the National Center for Public Policy Research (NCPPR). However, Microsoft’s board recommends voting against it, as the company already evaluates a wide range of assets (including Bitcoin) as part of its investment strategy.

12/6/2024

Microsoft’s AI division is poised for major growth, with Berstein analysts projecting it to surpass a $10 billion annual revenue run rate by the end of the next quarter.

Microsoft’s 10-Year Market Smashing Results  

Here’s a table summarizing performance in share price, revenues, and profits (net income) from 2014 to 2018.

	Share Price	Revenues	Net Income
2014	$46.16	$86.83	$22.07
2015	$46.70	$93.58	$12.19
2016	$56.21	$91.15	$20.54
2017	$72.26	$96.57	$25.49
2018	$108.04	$110.36	$16.57
2019	$138.06	$125.84	$39.24
2020	$205.01	$143.02	$44.28
2021	$286.50	$168.09	$61.27
2022	$276.41	$198.27	$72.74
2023	$330.72	$211.92	$72.36
TTM	$465.39	$279.99	$86.18

Revenue and net income in $billions

In the last decade, Microsoft’s revenue grew 222% while its net income went from $22.07 billion to over $86 billion (in the trailing 12 months). A big driver of profits over the past decade was Microsoft’s Intelligence cloud business, which grew 18% annually and drove operating profits of $37.88 billion in 2023 from $8.44 billion in 2014. 

As Microsoft looks to the second of the decade, a few key areas will determine its performance.   

Key Drivers of Microsoft’s Stock Performance

1. Productivity and Business Processes: Microsoft’s Office and Dynamics 365 solutions and its LinkedIn products currently make up around one-third of the company’s revenue.  Office in particular holds a near monopoly in office productivity software and most 3rd party applications have embeds, making switching costs high for this business line. LinkedIn also does not have a solid competitor in the professional networking space. High growth rates in this segment, but Microsoft has the advantage of controlling its price on its high market share products.
2. Intelligence Cloud: Microsoft’s Azure, OpenAI, GitHub, and SQL, among other cloud businesses, make up close to half of the company’s revenue. But the crown jewel is Azure which only makes up close to 30% of Microsoft’s revenue and grew 30% over the past year alone. The future of Microsoft will depend on Azure and its competition with Amazon’s (NASDAQ: AMZN) AWS will determine which company will dominate the Platform-as-a-Service (PaaS) and reward shareholders handsomely in the process.
3. Personal Computing: Windows, gaming, search, and devices are currently 25% of Microsoft’s business and this segment is the most open to competitors eroding market share. Outside of Windows, which has a solidified market share (and is not likely to dwindle), Microsoft search and devices will be facing a steep uphill battle over the coming years. Its acquisition of Activision is a positive for its gaming line but personal computing will play an ancillary part in Microsoft’s future.

Microsoft (MSFT) Stock Price Prediction in 2025

The current consensus 1-year price target for Microsoft stock is $500.00, which is a 15.29% upside from today’s stock price of $433.70. Of all the analysts covering Microsoft, the stock is a consensus buy, with a 1.39 “Buy” rating.

24/7 Wall Street’s 12-month forecast projects Microsoft’s stock price to be $495. We see Azure continuing its 20+% growth and earnings per share coming in right at $11.80.  

Microsoft (MSFT) Stock Forecast Through 2030 

Year	Revenue	Net Income	EPS
2024	$244.97	$88.93	$13.32
2025	$278.00	$99.25	$15.67
2026	$321.63	$115.65	$18.10
2027	$370.79	$136.81	$20.40
2028	$416.08	$151.87	$22.62
2029	$453.39	$166.56	$25.45
2030	$503.13	$181.71	$28.70

Revenue and net income in $billions

Microsoft Share Price Estimates 2025-2030

How Microsoft’s Next 5 Years Could Play Out

We expect to see revenue growth just over 8% and EPS of $15.67 for 2025. We expect the stock to still trade at a similar multiple next year, putting our estimate for the stock price for Microsoft at $548.00 in 2025, which is 26.35% higher than the stock is trading today.

Going into 2026, we estimate the price to be $633.00, with small revenue gains but margins expanding and an EPS of $18.10. We expect to see Microsoft’s P/E ratio steep down slowly each year through 2030. The stock price estimate would represent a 45.95% gain over today’s share price of $433.70.

Heading into 2027, we expect the stock price increase not to be as pronounced and earnings estimates of $20.40 per share, the stock price target for the year is $652.00. That is a 3% year-over-year gain from the previous year, but still up 50.33% from today’s stock price.

When predicting more than 3 years out, we expect Microsoft’s P/E ratio to drop to 30x in 2028 but grow its top line 14%. In 2028, we have Microsoft’s revenue coming in around $420 billion and an EPS of $22.62 suggesting a stock price estimate at $678.00 or a gain of 56.33% over the current stock price.

24/7 Wall Street expects Microsoft to continue its 10% revenue growth again and to generate $12.30 per share of earnings. With a price to earnings multiple of 35, the stock price in 2029 is estimated at $687.00, or a gain of 58.40% over today’s price.

Microsoft Stocks Price Target for 2030

We estimate Microsoft’s stock price to be $717.00 per share with a sub 10% year-over-year revenue growth. Our estimated stock price will be 65.32% higher than the current stock price of $433.70.

Year	Price Target	% Change From Current Price
2024	$495.00	Upside of 14.13%
2025	$548.00	Upside of 26.35%
2026	$633.00	Upside of 45.95%
2027	$652.00	Upside of 50.33%
2028	$678.00	Upside of 56.33%
2029	$687.00	Upside of 58.40%
2030	$717.00	Upside of 65.32%

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