Wedbush hikes price target on Microsoft to $600, saying “AI set to change the cloud growth trajectory”

Dan Ives loves one of his favorite stocks even more than he used to.

16.5% more, to be exact. That’s how much the Wedbush Securities analyst hiked his price target on Microsoft, a stock he rates as “outperform” and has on the firm’s “Best Ideas List.” That’s more than 20% above its record close of $490.11 on Tuesday, and well above the average analyst estimate of about $520.

The bump in the price target is down to “incrementally bullish recent AI customer checks in the field with a massive adoption wave of Copilot and Azure monetization now on the doorstep for Microsoft,” Ives wrote. “AI is set to change the cloud growth trajectory in Redmond.” (That’s a reference to where Microsoft is headquartered, for the uninitiated.)

Ives disagrees with reports that Microsoft’s Copilot AI chatbot isn’t getting much love from potential customers, suggesting it could add $25 billion to Microsoft’s revenue trajectory by fiscal 2026 (that is, the year ending in the middle of 2026).

“Our thesis remains that the cloud and AI monetization is going to comprise a bigger and bigger piece of Redmond going forward and will ultimately spur growth and margins over the coming years,” he concluded. “We believe Microsoft is just hitting its next phase of monetization on the AI front and more enterprises are accelerating their AI budgets and strategic footprint with Redmond into FY26 with the Street not fully appreciating the growth story.”