Bernstein Hikes Microsoft Target to $660, Bullish on AI

Bernstein raised its stock price target for Microsoft (MSFT) from $647 to $660, maintaining an outperform rating. The revision defies recent investor sentiment that increased AI spending may not be sustainable.

However, Bernstein is not alone in its bullish outlook. Wells Fargo recently raised its target from $650 to $700, while Tigress Financial increased its target to $690 and Bank of America moved to $500.

According to Bernstein, Microsoft’s recent results suggest investors are not overly concerned about AI infrastructure overspending. The firm also highlighted Microsoft’s limited purchase commitments beyond the next 12 months, which provide flexibility if AI demand shifts.

Microsoft delivered a healthy quarterly earnings report late last month, posting 18% revenue growth and 23% earnings growth. The Intelligent Cloud segment drove most of that growth, and analysts remain bullish on Copilot and Azure.

Meanwhile, Microsoft is developing its own AI accelerators, which could affect Nvidia’s market share. The Maia 200 accelerator has demonstrated 30% better performance per dollar, potentially reducing Microsoft’s exposure to unnecessary AI spending.

Despite stellar revenue, MSFT stock closed 2.26% (11.38 points) lower on Wednesday, August 12, 2026. The stock slipped another 0.05% (0.26 point) in pre-market trading.

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