# This Tech Stock Is Being Highly Overlooked in the AI Race > Source: > Published: 2026-08-24 15:30:25+00:00 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. Our 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. ## 24/7 Wall St. Price Target Summary | Metric | Value | |---|---| | Current Price | $483.24 | | 24/7 Wall St. Price Target | $590.17 | | Upside | 22.13% | | Recommendation | BUY | | Confidence Level | 90% | ## Why Microsoft Feels Overlooked Right Now Microsoft shares are down 3.37% over the past year and roughly flat year to date, even after ripping 24.03% in the last month. The [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. ## Bull Case: Path to $614 and Beyond Bulls 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/).” Copilot 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. ## Bear Case: Capex Digestion Risk The 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)). That 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. ## How Microsoft Stacks Up Against Alphabet and Amazon **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. **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. ## Bottom Line: I’d Buy It Here The 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. I’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. | Year | 24/7 Wall St. Price Target | |---|---| | 2026 | $590 | | 2027 | $607 | | 2028 | $712 | | 2029 | $784 | | 2030 | $837 | These 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. *Contact [email protected] for any questions or corrections.*