Microsoft Corp. shares hit their first record in about a year on Tuesday as the software maker's four-month rally gained momentum. The stock rose 0.4% to $543.45, surpassing a previous high that had stood since October 2025. Microsoft has gained more than 54% from a June low, adding roughly $1.4 trillion in market value, as sentiment toward the company and its position in artificial intelligence continues to improve.
The milestone marks a dramatic reversal for Microsoft, which only months ago was among the worst performers in the S&P 500 Index amid concerns that heavy spending on AI infrastructure wasn't generating sufficient returns, as well as fears about potential disruption facing software providers. The stock dropped 17% in June, its worst month since 2000, erasing nearly $600 billion in market value. That changed with a July 29 earnings report that revealed the fastest revenue growth for Microsoft's cloud computing business in four years. The stock jumped 16% the following day, setting the stage for a rebound that resulted in the company's best quarterly showing since 1998.
At least two firms raised their ratings on the stock to buy following the July earnings report, expressing confidence in Microsoft's ability to capitalize on demand for AI services. Of the 72 analysts tracked by Bloomberg that cover Microsoft, 68 now have buy ratings and none have sell ratings. The average price target of $584 implies upside of about 8% over the next 12 months from Tuesday's close, according to data compiled by Bloomberg.
Despite the recent gains, the stock remains a laggard in 2026 due to its first-half slump. The shares have risen about 12% this year, compared with a 21% advance for the tech-heavy Nasdaq 100 Index and 14% for the S&P 500. Among the Magnificent Seven tech giants, Microsoft's performance is roughly in line with Alphabet Inc. and Amazon.com Inc., but lags Meta Platforms Inc., Apple Inc. and Nvidia Corp., which are all up more than 15%.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing