Global financial institution Wells Fargo has decreased Microsoft’s (MSFT) stock price target from $650 to $625. Despite the revision, Wells Fargo’s target still has a 62.37% upside from current price levels. Citi has also lowered its target for Microsoft from $620 to $570. Meanwhile, Wall Street’s average price target for MSFT is $559.14. Let’s discuss why Wells Fargo and Citi lowered their price target expectation for MSFT and if you should be worried.
Why Is Wall Street Lowering Their Stock Price Target For Microsoft?
Microsoft (MSFT) share prices have seen a 16% dip in the last six months. Despite strong cloud revenue growth, investors are most likely skeptical about the company’s massive AI capital expenditure plans. Microsoft launched Microsoft Frontier Company, a $2.5 billion initiative to support AI deployments. Investors don’t seem convinced about the investment, which reflects in the falling share price in the last few months.
The AI boom has led to substantial growth for hardware companies that manufacture the processors (GPUs and CPUs) needed for AI computation. Microsoft, however, is a software company and has not benefitted from the AI surge in the same way as Nvidia (NVDA) and others.
It is possible that Wells Fargo and Citi are considering the ongoing geopolitical tension between the US and Iran for decreasing their stock price target for Microsoft (MSFT). Oil prices have already surged, and may add to the already strained economy. Although inflation has fallen 0.4% in June 2026, the most significant single-month dip in more than six months, July may see an uptick.
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Despite the lowered price target, Wall Street is still optimistic about Microsoft’s (MSFT) future. The stock climbed to an all-time high of $555.45 in July of 2025, and could see a rebound to its peak levels very soon. Wall Street, in average, expects Microsoft (MSFT) to breach its previous peak.