Microsoft is poised to build on an already-strong 2025 performance, according to Citi. The bank hiked its price target to $540 per share from $480. That implies upside of 19% from Wednesday’s close. Citi also kept its buy rating on the stock. Shares of Microsoft have added 7% this year. MSFT YTD mountain MSFT YTD chart Analyst Tyler Radke highlighted Microsoft’s strong fiscal earnings and revenue beat along with strong cost efficiencies and improving performance from its Azure cloud business. Microsoft on Tuesday said it would lay off roughly 6,000 employees, or 3% of its workforce, which Radke called a positive for the stock. The analyst estimated that these layoffs could “help generate incremental net savings upwards of $1B+ into FY26 to help offset the incremental depreciation/ CapEx cost.” “We feel this signals prudent operating efficiency. We believe savings will be partially reinvested into R & D, focused on the top priority initiatives across their AI portfolio,” he added. “We are returning our growth estimates back to initial expectations before the Tariffs news in April with deescalation on Tariffs, and resilient FQ3 results which suggest MSFT is more insulated from market volatility given their leading positioning in GenAI among Enterprises. We increase key metrics such as Azure back to 30%+ growth trajectory into FY26,” Radke said. Analysts are mostly bullish on Microsoft. LSEG data shows 56 of 63 analysts covering the stock rate it a buy or strong buy. The average analyst price target points to 11% upside.
