Goldman Sachs revamps Microsoft stock price target before earnings

Goldman Sachs conscionable struck a remarkably assured code connected Microsoft (MSFT)stock just up of a cardinal net study connected January 28.

The steadfast slapped the bundle elephantine with a buy standing and an eye-popping $655 terms target, which implies astir 37% upside from existent prices.

I can’t accidental however different analysts spot it, but for me, Microsoft has been a unsocial stock.

Despite its continued cardinal outperformance and beardown stock-market showing, it’s ne'er rather been the “it” stock.

However, that antithetic estimation hasn’t deterred the stock, which has posted a jaw-dropping 91% gain implicit the past 3 years, comfortably beating the broader market.

Last year, however, show was mostly muted, with the stock up conscionable 7%, arsenic AI fatigue appeared to drawback up with it, adjacent considering its first-mover advantage.

Following the dip, though, the stock’s present ripe for the picking, trading astatine implicit 28-times non-GAAP guardant earnings (12% little than its five-year average).

It’s absorbing to enactment that Goldman’s terms people is the astir bullish among the large analysts.

• Morgan Stanley: $650 terms people (overweight).

• Barclays: $610 terms target.

• J.P. Morgan: $575 terms people (buy).

• Wedbush: $625 terms people (outperform).

On apical of that, Goldman’s rationale is possibly what sticks the most, wherever it argues the marketplace is underappreciating the semipermanent worth its AI endeavors tin unlock for the business.

Goldman Sachs says the broader marketplace isn’t pricing successful astir arsenic overmuch worth arsenic Microsoft’s Copilot tools and AI agent-based workflows adhd to the company’s semipermanent case.

At the halfway of its attack is the content that Microsoft’s attack is moving rapidly beyond conscionable experimentation and into practical, repeatable usage cases.

Since its merchandise backmost successful 2023, Microsoft’s “family of Copilot apps” has been a juggernaut for the business. In fact, during the FQ4 2025 net call, CEO Satya Nadella said that it boasted 100 cardinal monthly progressive users crossed commercialized and consumer segments, according to the The Times of India.

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Moreover, successful the latest net call, Nadella remarked that “more than 90% of the Fortune 500” are utilizing Copilot.

A large portion of its occurrence is its unsocial positioning, sitting straight wrong products that customers are already using.

Which is wherefore seasoned expert steadfast Wedbush argued that the power-packed combo of Copilot and Azure could perchance adhd $25 cardinal successful income by fiscal 2026.

That form’s a large portion of why, successful Goldman’s upside scenario, Microsoft whitethorn deliver more than $35 successful net per share by fiscal 2030 (north of 20% EPS growth), trumping the mid-teens enlargement expected from astir mega-cap players.

On apical of that, Goldman points to Microsoft’s increasing absorption connected AI agents, efficaciously revolutionizing however enactment gets done wrong organizations.

That, successful turn, volition thrust stickier usage, on with much predictable semipermanent monetization with Microsoft's vertical integration (AI compute, platforms, and applications), giving it a superior edge.

For these reasons, its power-packed AI strategy volition apt construe into robust and measurable request crossed its business.

• Infrastructure (Azure and AI information centers): More AI agents successful play volition necessitate stronger grooming and propulsion inference request higher. For perspective, Microsoft’s Azure concern has already blown past $75 cardinal successful income successful fiscal 2025, and that level of maturation is improbable to halt anytime soon.

• Platform (Foundry and cause services): In July 2025, Satya Nadella said Foundry APIs processed a whopping 500 trillion tokens, up sevenfold.

• Applications (Copilot, GitHub, Dynamics): Microsoft tin efficiently embed agents into mundane workflows. For a small color, customers reportedly created 3 cardinal agents done SharePoint and Copilot Studio successful a year, portion GitHub Copilot skyrocketed to 26 cardinal users by precocious 2025.

It’s besides important to enactment that the marketplace for agent-based AI is massive.

For instance, Gartnersaid that 40% of endeavor apps volition see task-specific AI agents by the adjacent of 2026.

Wall Street mightiness beryllium excited astir agentic AI, but the show spread is intolerable to ignore.

For instance, much than 40% of agentic AI projects might beryllium canceled by the extremity of 2027, with costs outpacing results,Gartnerwarned recently. Another worrying inclination it besides flagged was wide “agent washing,” with conscionable 130 vendors being viewed arsenic genuinely agentic alternatively than repackaged chatbots.

Real-world show information besides backmost up that caution.

Related: Cathie Wood drops $50 cardinal connected AI stock, dumps favorite

In TheAgentCompany benchmark, which efficaciously tested 175 realistic workplace tasks (stuff similar web apps, documents, and code), adjacent the premier AI exemplary completed conscionable 30% of tasks.

Moreover, the astir communal setups really performed acold worse, often getting stuck successful loops oregon failing successful analyzable interfaces.

The Reddit assemblage broadly agrees, and a pertinent station from idiosyncratic hkreporter2 successful the AI_Agents forum (116,000 agents) said it best.

Related: Nvidia CEO sends biblical-scale world cheque connected AI

This communicative was primitively published by TheStreet connected Jan 17, 2026, wherever it archetypal appeared successful the Investing section. Add TheStreet arsenic a Preferred Source by clicking here.