{"slug": "this-tech-stock-is-being-highly-overlooked-in-the-ai-race", "title": "This Tech Stock Is Being Highly Overlooked in the AI Race", "summary": "Microsoft Corp. (NASDAQ: MSFT) is the most overlooked AI stock, with a 24/7 Wall St. price target of $590.17, implying 22.13% upside from $483.24, driven by Azure's $100 billion annual revenue run rate and Copilot's 30 million paid seats. The stock is down 3.37% over the past year but up 24.03% in the last month, after July earnings showed revenue of $90.01 billion (up 17.75%), non-GAAP EPS of $4.74, and Azure growth of 43%.", "body_md": "Microsoft has become the quiet outlier in the AI trade. While **NVIDIA** ([NASDAQ:NVDA](https://247wallst.com/companies/NVDA/) | [NVDA Price Prediction](https://247wallst.com/companies/nvda/price-prediction)) absorbs the spotlight and hyperscaler rivals chase headlines, **Microsoft** ([NASDAQ:MSFT](https://247wallst.com/companies/MSFT/)) is quietly compounding the deepest enterprise AI moat in software.\n\nOur 24/7 Wall St. price target for Microsoft is $590.17, implying upside of 22.13% from a current price of $483.24. We rate it a buy with high confidence, driven by an [Azure business that just crossed $100 billion in annual revenue](https://247wallst.com/investing/2026/08/22/microsoft-has-something-nvidia-doesnt-and-heres-why-it-matters/) and a Copilot franchise that has become the fastest-monetizing enterprise product in the company’s history.\n\n## 24/7 Wall St. Price Target Summary\n\n| Metric | Value |\n|---|---|\n| Current Price | $483.24 |\n| 24/7 Wall St. Price Target | $590.17 |\n| Upside | 22.13% |\n| Recommendation | BUY |\n| Confidence Level | 90% |\n\n## Why Microsoft Feels Overlooked Right Now\n\nMicrosoft shares are down 3.37% over the past year and roughly flat year to date, even after ripping 24.03% in the last month.\n\nThe [July earnings report](https://247wallst.com/investing/2025/07/30/live-does-microsoft-nasdaq-msft-rally-after-todays-earnings/) was a statement: revenue of $90.01 billion grew 17.75%, non-GAAP EPS came in at $4.74, and Azure grew 43%. The stock reacted with a 15.51% day-of pop, its strongest earnings reaction in the dataset. Retail sentiment on Reddit has followed, with recent posts on the OpenAI stake driving bullish readings.\n\n## Bull Case: Path to $614 and Beyond\n\nBulls see Microsoft as the purest scaled beneficiary of enterprise AI adoption. Commercial remaining performance obligations sit at $678 billion, up 84%, a backlog that de-risks near-term revenue. Management guided Q1 FY27 Azure growth to approximately 45% in constant currency, and CFO Amy Hood flagged that “[demand continues to exceed available supply](https://247wallst.com/investing/2026/04/30/ai-data-center-spending-rushes-toward-800-billion/).”\n\nCopilot has cleared 30 million paid seats, GitHub Copilot revenue accelerated over 60% quarter over quarter, and a new per-seat plus consumption model expands the TAM materially. [Our bull scenario points to $614.33, a 27.13% return](https://247wallst.com/investing/2026/08/18/price-prediction-one-number-could-decide-how-high-microsoft-goes-in-2027/), on stronger Azure re-rate and Copilot ARPU expansion.\n\n## Bear Case: Capex Digestion Risk\n\nThe main risk is the sheer cost of the buildout. Full-year capex hit $115.95 billion, up 79.62%, and free cash flow fell 23.19% in the quarter. Bears argue this compresses returns if [AI demand normalizes](https://247wallst.com/investing/2026/08/22/ais-absurd-spending-boom-hyperscalers-are-spending-102-of-cloud-revenue-on-capex/). All that spend flows straight to the power, cooling, and networking vendors behind the racks (we broke down seven of those suppliers in a free report here: [7 Stocks Powering the AI Boom](https://247wallst.com/pages/ai-power-seven-offer-d905ec99.html)).\n\nThat said, bulls counter that the FCF decline reflects heavy investment in capacity management has repeatedly said is fully monetized in-quarter, and net income still grew 31.33%. Our bear-case target is $507.22, still modestly positive, reflecting the durability of the installed base.\n\n## How Microsoft Stacks Up Against Alphabet and Amazon\n\n**Alphabet** ([NASDAQ:GOOGL](https://247wallst.com/companies/GOOGL/)) is the most direct cloud AI comparable. Google Cloud accelerated to 82% growth in Q2 2026, hitting $24.77 billion, and Alphabet is guiding $175 to $185 billion in 2026 capex. Google Cloud is growing faster, but Azure is much larger at scale, and Microsoft’s Copilot attach into Office 365 remains structurally hard to replicate.\n\n**Amazon** ([NASDAQ:AMZN](https://247wallst.com/companies/AMZN/)) trades at a P/E of 36, meaningfully richer than Microsoft’s 27, despite AWS growing 37% in Q2, a slower rate than Azure’s 43%. That valuation gap makes our $590 target look conservative.\n\n## Bottom Line: I’d Buy It Here\n\nThe 24/7 [Wall St. price target of $590.17 and buy rating](https://247wallst.com/investing/2026/08/12/54-analysts-one-verdict-microsofts-upside-isnt-done-yet/) carry 90% confidence. The tipping factor is the disconnect between Microsoft’s growth acceleration and its P/E of 27, cheaper than Amazon on far higher margins.\n\nI’d be a buyer here if Azure sustains 40%-plus growth into FY27. I’d stay on the sidelines if capex intensity keeps free cash flow negative on a YoY basis for another two quarters.\n\n| Year | 24/7 Wall St. Price Target |\n|---|---|\n| 2026 | $590 |\n| 2027 | $607 |\n| 2028 | $712 |\n| 2029 | $784 |\n| 2030 | $837 |\n\nThese projections assume Microsoft sustains Azure growth above 30% and Copilot seat expansion continues. Meaningful upside or downside could come from OpenAI’s evolving relationship with Microsoft or a broader slowdown in enterprise IT budgets.\n\n*Contact [email protected] for any questions or corrections.*", "url": "https://wpnews.pro/news/this-tech-stock-is-being-highly-overlooked-in-the-ai-race", "canonical_source": "https://247wallst.com/investing/2026/08/24/this-tech-stock-is-being-highly-overlooked-in-the-ai-race/", "published_at": "2026-08-24 15:30:25+00:00", "updated_at": "2026-08-24 15:44:48.495435+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-products", "ai-infrastructure"], "entities": ["Microsoft", "NVIDIA", "Alphabet", "Amazon", "Azure", "Copilot", "GitHub Copilot", "Amy Hood"], "alternates": {"html": "https://wpnews.pro/news/this-tech-stock-is-being-highly-overlooked-in-the-ai-race", "markdown": "https://wpnews.pro/news/this-tech-stock-is-being-highly-overlooked-in-the-ai-race.md", "text": "https://wpnews.pro/news/this-tech-stock-is-being-highly-overlooked-in-the-ai-race.txt", "jsonld": "https://wpnews.pro/news/this-tech-stock-is-being-highly-overlooked-in-the-ai-race.jsonld"}}