Microsoft shares climbed after the company named Azure as the first announced hyperscale cloud provider to deploy 3M’s Expanded Beam Optical technology in its data centers. Fresh analyst optimism on AI-driven growth and evidence of resilient enterprise IT spending added to the move.
Microsoft stock rallied 3.0% in morning trading after the company unveiled a strategic partnership with 3M, positioning Azure as the first announced hyperscale cloud provider to deploy 3M’s Expanded Beam Optical technology in its data centers. The deal runs two ways: Microsoft gains 3M’s optical connectivity materials designed to cut maintenance in high-density AI server environments, while 3M adopts Microsoft’s AI and digital platforms to automate its own operations.
Analysts lift the growth outlook
The partnership landed alongside fresh analyst commentary. Evercore ISI raised its price target to $525 from $510 while keeping an Outperform rating, projecting double-digit revenue and operating income growth for Microsoft in fiscal year 2027. A mid-year survey of chief information officers published by Bernstein showed U.S. IT budget growth approaching 2021 COVID-era strength, with Microsoft ranking among the top two vendor beneficiaries.
Not every desk moved in the same direction. Wells Fargo trimmed its target to $625 from $650 on higher capacity cost assumptions but kept its Overweight rating. On the same day, Citigroup’s Tyler Radke assigned a Sell rating and cut his target to $570 from $620, while Mizuho’s Greg Moskowitz reiterated a Buy but lowered his target to $490 from $515.
Where the stock stands
The broader tape helped, with the S&P 500 gaining 0.4% and the NASDAQ advancing 0.6% during the session. Microsoft shares traded at about $388.91, rebounding from a multi-year support level, with 36 analysts surveyed by TipRanks holding an average price target of $559.14.
That rebound sits against a weaker recent run: Microsoft shares lost 15.3% over the past six months, against a forward 12-month price/earnings ratio of 19.82X. Microsoft’s next earnings report is scheduled for July 29, 2026, and Finbold notes the 12-month forecasts could be invalidated if the stock drops below its support level around $358.
Sources: Investing.com, Finbold, Zacks Investment Research
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