Is MSFT Still a Buy in 2025?

Microsoft (MSFT) is making waves again in a world of ever-changing technologies. In the lead-up to July 30, 2025, as it awaits its next Q4 earnings report, all eyes are on the tech titan indeed following its spectacular 31% surge in its stock value in just the last three months, with MSFT recently hitting an all-time high of $514.64. It is equally not only hype as this impressive stock surge reflects the fact that Microsoft is a significant powerhouse in the artificial intelligence (AI) and cloud computing industries, two of the hotbeds of the current digital revolution.

Numbers That Define the Surge

The anticipation for Microsoft’s earnings call is electric, powered by its impressive recent performance:

• Last quarter’s revenue came in at $70.1 billion, a 13% year-over-year rise.
• Earnings per share (EPS) jumped by 18% to $3.46.
• Commercial remaining performance obligations (future contracted revenue) soared 34% year-over-year to $315 billion, with management noting around 40% of this should be converted to revenue within the next 12 months.

These figures paint the picture of an enterprise firing on all tubes, mainly thanks to robust demand for its Azure cloud offerings and relentless expansion in AI-driven products.

The Engines Behind Microsoft’s Success

Microsoft’s runaway growth is no accident. The company has been methodical, capitalizing on two mega-trends: the AI boom and enterprises embracing digital transformation. Microsoft’s strategic partnership with OpenAI and broad integration of AI tools across its product suite make it a formidable force.

Key business segments are expected to continue delivering:

• Intelligent Cloud: Projected revenue is between $28.75 billion and $29.05 billion for Q4 as Azure remains a standout performer amidst global enterprise cloud adoption.
• More Personal Computing: Revenue is expected to hit between $12.35 billion and $12.85 billion, with both search/advertising and gaming divisions seeing potentially strong growth.
• Advertising: Search and news advertising revenue could see “high-teens” percentage growth, and the gaming division is tipped for mid-to-high single-digit advances, especially in Xbox and related content/services.

Microsoft’s operational focus and investment in cutting-edge AI infrastructure means margins may feel a short-term squeeze, but it is a calculated move intended to strengthen future competitive advantage.

Wall Street’s Pulse and the “Strong Buy” Signal

Despite the swift rally in the stock price, analysts remain bullish. According to the latest data, Microsoft enjoys an average brokerage recommendation (ABR) of 1.23 a reading just shy of a “Strong Buy.” Out of 47 brokerage firms weighing in, 39 have ranked MSFT a Strong Buy and five more a Buy, accounting for nearly 94% of all recommendations.

Looking at price forecasts, optimism continues:

• The average price target is $552.35, hinting at an 8% upside from the latest record.
• The most bullish analysts set their target at $626, a staggering 23% above current prices.

Microsoft’s track record of exceeding expectations in recent quarters only adds fuel to this positive outlook: in the last quarter, it topped analysts’ profit estimates by a notable 8.13% margin.

Should You Buy After This Rally?

Rapid growth often drives valuations higher, raising the question of whether so much optimism is already included in the current stock price. For Microsoft, the company’s fundamentals remain compelling:

• Steady double-digit revenue growth.
• Clear, consistent corporate execution.
• Market-shaping leadership in AI and cloud computing.

For Q4, Wall Street analysts expect EPS to land at $3.35, representing a 13.6% year-over-year increase from $2.95 a year ago. Such gains are powered by forward-committed enterprise contracts, ongoing digital transformation waves, and Microsoft’s ability to maintain operational efficiency even while investing heavily in next-gen tech.

A Broader Perspective

Although Microsoft stock market valuation currently stands at record levels, future investments in AI and cloud appear to be sound due to strong backlog of contracts and the increase in technology penetration globally. Nevertheless, investors ought to have the consideration that large rallies may at times extend short-term value. In case the growth weakens, or marginal tensions escalates, volatility may occur in the share price.

What The Future Holds?

The combination of the operational excellence at Microsoft, its strategic investments in AI, and the widely spread customer momentum put it in the favorable position as Microsoft enters Q4 and further. But the majority of analysts believe that there is still more to go, given the impressive pipeline coupled with the unmatched financial might of the company.

Microsoft is one of the highest seeking investments to use in long-term generation in the technology business with high records of growth to its investors. The current line in the stock can be attributed to the actual business and its momentum driven by cloud demand and artificial intelligence ingenuity that has not yet received any notice of hinderance. As June quarter figures come around and the analysts are largely optimistic, the current story at Microsoft, ever since its inception, is only set to be more intriguing.