Analysts Say You Should Ignore ‘Short-Term Blips’ and Keep Buying Microsoft Stock

Core Insights - Microsoft (MSFT) shares dropped nearly 3% to $525.97 due to new earnings and litigation news, but analysts view this as a buying opportunity during market downturns [1] - The company is solidifying its leadership in cloud technology and artificial intelligence, with several firms raising price targets following increased Azure adoption and initial success of AI Foundry technology [1] Company Performance - Microsoft reported an 18% revenue growth to $77.7 billion in the fiscal first quarter of 2026, with operating income growth of 24% to $38 billion [7] - The company achieved a GAAP EPS of $3.72, a 13% increase, while non-GAAP EPS rose 23% to $4.13 [7] - Microsoft has a forward price/earnings ratio of 35.2 and a price/sales ratio of 14.3, which are relatively high compared to the S&P 500 technology industry average of 26x [5] Market Position - Microsoft is the largest software firm globally, with a market capitalization of $3.89 trillion, and operates in cloud computing, productivity software, and AI technology [3] - The company has a strong balance sheet, a profit margin of 36%, and a return on equity of 32%, reinforcing market confidence as it approaches 2026 [2] - Over the past 52 weeks, MSFT's stock has ranged from $344.79 to $555.45, reflecting a 23% growth year-to-date, outperforming the S&P 500's 16% growth [4]