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Microsoft (MSFT) stock joined the elite $4 trillion market-cap club on Tuesday as it moved toward an eighth straight win. Shares are building the right side of a flat base, with a buy point of 555.45. The buy point is also Microsoft stock's all-time high, according to IBD MarketSurge chart analysis tools. Is Microsoft a buy now? The tech giant and Dow Jones index member will report fiscal first-quarter results on Wednesday after the market close. Analysts polled by FactSet estimate 11% earnings growth to $3.67 per share, with 15% sales growth to $75.4 billion. The stock is one of the Magnificent Seven. It has a market cap above $4 trillion and outstanding shares of 7.43 billion. The stock has outperformed the S&P 500 this year, with the appetite for artificial intelligence plays in the stock market boosting Microsoft's stock fortunes. For Microsoft's fiscal 2026, which started on July 1, Wall Street is looking for a 14% earnings increase to $15.56 per share. In 2027, analysts see profit growing 18% to $18.30 per share. Analysts Raise Price Target For Microsoft Stock Microsoft shares gapped up on Tuesday in a flat base before trimming gains to 2%. The move came as the software maker reached a deal with OpenAI that values its stake in the ChatGPT creator at $135 billion. On Monday, Guggenheim analysts raised their price target to 586 with a buy rating. All 61 research firms polled by FactSet now have a buy rating, according to Barron's. Analysts are encouraged by Microsoft's AI-enabled cloud platform and Azure's recurring revenue, and they expect revenue beats in fiscal 2026. In September, Morgan Stanley named Microsoft its top pick in the software sector. It raised its higher price target to 625 from 582 amid a "broadening set of growth drivers." Analysts noted Microsoft's record of double-digit earnings and sales growth, high dividend yields, share repurchases, and a strong Azure growth outlook. Are These Magnificent Seven Stocks A Buy Now? Alphabet | Amazon | Apple | Meta | Microsoft | Nvidia | Tesla Open AI Partnership Microsoft's Azure business — its cloud computing segment — has been benefiting since the company partnered with OpenAI. Melius research analysts observed in July that, together, the two companies can transform the software-as-a-service industry through Agentic AI tools that "offer greater control, customization, and efficiency compared to traditional SaaS." Microsoft shares gapped up after results for the June-ended quarter on July 31. Earnings grew 24% to $3.65 per share while sales rose 18% to $76.4 billion. Revenue from Azure and cloud services grew 39%. For the full year, sales from Azure grew to more than $75 billion — a 34% increase. Microsoft also said it returned $9.4 billion to shareholders through dividends and share repurchases in its fiscal fourth quarter. Microsoft is an IBD Long-Term Leader and among IBD's Tech Leaders to watch. The stock also leads the desktop software industry group, according to IBD Stock Checkup. Microsoft holds a strong Composite Rating of 97 on a scale of 1-99. Steady earnings growth over the past eight quarters has helped land the stock an Earnings Per Share Rating of 95. The Relative Strength Rating of 76 is below Investor's Business Daily's recommended threshold of 80. Another point to note is the relative strength line, which has flatlined since the stock's earnings gap-up on July 31. Microsoft Stock: Strong Fund Ownership But mutual funds have been net buyers of the stock over the past 13 weeks, giving Microsoft an Accumulation/Distribution Rating of B. The strong support from institutional managers is also evident in MarketSurge's quarterly fund ownership data. Over the past eight quarters, more than 10,000 funds have held shares. Demand for the stock has also been running high over the past 50 trading days, giving Microsoft stock an up/down volume ratio of 1.1 Total fund ownership sits at 43% of outstanding shares. In the IBD mutual fund index, the MFS Growth Fund (MFEGX) and the AllSpring Growth Fund (SGRAX) hold Microsoft shares. Please follow VRamakrishnan on X/Twitter for more news on the stock market today. YOU MAY ALSO LIKE: Is Nvidia A Buy?
