Microsoft stock (NASDAQ: MSFT) has dipped below the psychological level of $500 on Thursday. The fall comes after investors are weighing in on the massive AI costs that the software titan is spending to build the infrastructure. Concerns are rising about whether AI capex can generate sufficient returns for the company’s expansion plans. Wall Street has been intensifying the scrutiny every quarter, keeping its investments in check.
The renewed pressure on Microsoft stock comes even after the company remains the beneficiary of cloud computing and AI demand. The Satya Nadella-led company is seeing billions in revenue from Azure, enterprise software, and its partnerships with OpenAI and other firms supporting its long-term growth trajectory. However, Wall Street is becoming increasingly worried about its spending, which they feel is outweighing its growth.
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What Next For Microsoft Stock?
Bank of America Securities analyst Tal Liani, the Managing Director in the equity research group, is seeing through the noise. When Microsoft stock dipped below the $500 level, he increased his price target for MSFT. The analyst also reiterated the buy call, urging institutional clients to take an entry position in the equity.
Microsoft stock’s new price target from Bank of America Securities is now $600. That could be a profit of nearly $100 per share if traders take an entry position in the equity today. It also marks an uptick and return on investment (ROI) of approximately 20% from its current price. Therefore, an investment of $1,000 could turn into $1,200 next if the forecast turns out to be accurate.
The Bank of America Securities analyst wrote in the note to clients on Tuesday (September 1, 2026) that he sees Azure’s valuation unlocking potential profits for Microsoft. Azure had posted 39% growth in fiscal Q3 and 43% in Q4, with management guiding to 45% in Q1 2027. It outbeat Wall Street’s estimate of 40.6%, and the analyst sees the numbers growing next quarter. This is among the reasons why he increased Microsoft’s stock price target to $600.