Uncertainty has defined the stock market in the early parts of the year. Nvidia (NVDA), one of the biggest winners of 2024, plummeted, falling from an all-time high and losing $600 billion in market cap. Yet, amid uncertainty and volatility, Microsoft (MSFT) has emerged as a possible high-reward option, as it recently got a $510 target and could be the best mega-cap stock to buy in 2025.
The United States has struggled with the growing geopolitical tensions derived from US President Donald Trump’s aggressive economic policy. Unfortunately, Wall Street has not been exempt from this uncertainty. Yet, of the stocks that have a market cap of more than $200 billion, which has proven to have the most potential?
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Microsoft Emerging as Best Mega Cap Stock? Why Analysts Gave MSFT a $500 Target
Entering 2025, the AI sector was poised to build on extensive demand that had been building for the last couple of years. There was no shortage of big-cap stocks looking to leverage that demand into a surging share price. Moreover, few had been as successful as Microsoft.
After investing $13 billion in ChatGPT developer OpenAI, the company has shown no signs of slowing down its interest in the sector. That has led it to be one of the big benefits of the continued boom. Now, with Microsoft (MSFT) getting a $510 price target, could it be the best mega-cap stock to buy in 2025?
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The company’s cloud computing business also provides extensive optimism. Specifically. Azure is expected to grow in Q2 FY 2025 by 31%. That will be just a part of its growth trajectory. During that Q2 earnings call, the company announced plans to expand its data center capacity. That, along with infrastructure developers, should continue driving efficiency for its cloud and AI workloads.
Currently, the stock holds a 25% upside after being given its recent price target, according to TipRanks. Alternatively, CFRA analyst Angelo Zino was among 29 analysts who gave the stock a buy rating. Moreover, it reinforces a strong buy rating given to the company that has some tremendous potential.
According to CNN data, the stock sports a median price target above the $500 mark. However, its high-end price projection sits at $650, which is a 59% jump from its current position. Alternatively, its low-end projection is at $425, which is still an increase of 4% from where it stands currently. Altogether, it ensures Microsoft is among the best big-cap stocks to invest in this year.