Wedbush analyst Dan Ives sees Microsoft on a clear path to achieving a valuation of 5 trillion dollars by 2026, which is currently a very ambitious goal, as the market value is presently around 3.8 trillion dollars. He highlights a price target for Microsoft stock of about 600 dollars, which represents an upside potential of approximately 150 dollars compared to the current price of about 498 dollars.
The Advantage of AI and Cloud
Ives justifies his optimistic forecast mainly with Microsoft’s leading position in the AI sector. According to his conversations with numerous enterprise customers, Microsoft’s cloud and AI platform is ‘5 to 7 percent above expectations’ and is only at the beginning of its growth potential. Particularly noteworthy is the monetization of generative AI services: For every contract over 100 dollars, an additional 50 dollars flows into AI-related services. This creates an additional revenue stream worth billions – in the coming year alone, an additional revenue of about 25 billion dollars is expected.
Massive Investments for Sustainable Growth
Microsoft is massively investing in the expansion of its infrastructure to support strong growth in cloud and AI services. For the year 2025, investments totaling around 80 billion dollars are planned for data centers. The rising demand for products like Copilot and the Azure cloud platform further drives growth, particularly in the business customer segment, with banks, government agencies, and retailers as the main consumers of AI solutions.
These developments have significant implications for investors: The strong market position in the promising field of Artificial Intelligence, as well as the expected revenue increases, could significantly boost Microsoft’s stock and lead to considerable long-term value appreciation. Analyst Dan Ives therefore continues to recommend buying the stock, pointing to the high price potential until 2026.