Microsoft remains one of the most talked-about tech stocks right now, and last night a new chapter was added to that story. After the market closed, the company released its fourth-quarter results for fiscal year 2026, and the market reacted immediately: the stock rose by more than 8% in after-hours trading. For a stock that has actually been under pressure so far this year, that’s a striking turnaround.

We recently looked at the outlook for Microsoft in our article from June 25, 2026, which you can find HERE. It’s time to see if yesterday’s results confirm that outlook and what this means for the stock price in the short and longer term.

How did Microsoft’s earnings turn out?

Microsoft reported revenue of $90.0 billion for the quarter ending June 30, 2026, an 18% year-over-year increase and well above the analyst consensus of approximately $87.6 billion. Earnings per share came in at $4.74, compared to an expectation of $4.24. Net income rose 31% to $35.8 billion.

The strongest signal came from the cloud division. Azure and other cloud services grew by 43%, an acceleration from the 40% growth in the previous quarter. For the full fiscal year 2026, Azure revenue exceeded $100 billion for the first time, a milestone that CEO Satya Nadella specifically highlighted.

The downside remains the high investment burden. Microsoft spent $41 billion on investments in data centers and chips during the quarter, an increase of more than 70% year-over-year. These types of investments put pressure on free cash flow in the short term, the money remaining after all investments and expenses have been paid. However, at $19.6 billion, that free cash flow did exceed expectations.

The market reacted enthusiastically: the stock rose by more than 8% in after-hours and pre-market trading, from $390.54 to around $420.

What is the analysts’ outlook on Microsoft’s stock price?

The analyst consensus remained largely positive in the run-up to the earnings report, with an average rating of “Strong Buy” and no sell recommendations. However, price targets vary widely, with the lowest at $415 and the highest at $680, and an average ranging from $577 to $583. Several brokerage firms have slightly lowered their price targets in recent weeks ahead of the earnings report; for example, Citi lowered its target from $620 to $570, but emphasized that this primarily reflected broader valuation compression in software stocks and not a deterioration in underlying operating results.

With yesterday’s results, which exceeded expectations in virtually every respect, analysts are now focusing primarily on the guidance for fiscal 2027 and on whether the high level of investment will continue to translate into profitability in the coming quarters.

What is Yelza’s outlook on Microsoft’s stock price?

Below you’ll find Microsoft’s stock price chart, which includes the most likely scenario from our model for the coming period.

Our model anticipates a rise toward our first price target of $460 in the coming period. From that level, the price may briefly pull back to the previously tested support zone around $400 to $410 before resuming its upward trajectory toward $500 to $555. This phase will be followed by a new correction, after which the price will continue its upward trajectory toward our long-term price target of $630 for 2027.

As long as the price remains above this support zone, the long-term technical outlook remains constructive. Given the strong underlying fundamentals, a pullback toward this level should be viewed as an additional buying opportunity rather than a warning signal.

Conclusion

With its fourth-quarter results for fiscal year 2026, Microsoft has demonstrated that growth in cloud and AI remains strong, with Azure surpassing the $100 billion revenue mark for the first time in a full fiscal year. Last night’s stock price reaction confirms that investors view these results as reassuring after months of uncertainty regarding the return on the company’s substantial AI investments.

If you don’t yet hold a position in Microsoft, you might consider building one up in stages, with the $400 to $410 range serving as an attractive additional entry point in the event of a pullback. If you already hold a position, you may want to consider holding onto it as the stock approaches the first intermediate target around $550 to $555. Our long-term price target for Microsoft remains unchanged at $630.

We are closely monitoring developments at Microsoft and will provide a follow-up update when new figures or relevant developments emerge.

Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts’ own insights and experiences. They are therefore intended for educational purposes only.