The bank highlights Azure growth as critical for MSFT stock ahead of July 29 earnings amid a 20% YTD decline.
Bank of America reiterated its Buy rating on Microsoft and maintained a $500 price target, citing stronger Azure growth expectations ahead of the company’s fiscal fourth-quarter earnings on July 29. Microsoft stock has underperformed in 2026, falling roughly 20% year to date despite expansion in its AI and cloud businesses.
The bank emphasized that Azure revenue growth, guided at 39% to 40% year over year in constant currency, will be the key metric for investors. Hitting or exceeding this range is seen as essential for the stock’s recovery, while a miss could amplify concerns about Microsoft’s AI infrastructure spending returns.
Demand for Azure has outpaced available computing capacity for several quarters, limiting revenue recognition. The upcoming earnings report may clarify whether this bottleneck is easing.