Microsoft Stock Climbs 2.3% to $534 as Investors Bet Big on AI, Pushing Shares Closer to 52-Week High

NEW YORK — Shares of Microsoft Corp. rose more than 2% on Friday afternoon, extending a recovery that has brought the software giant within reach of its 52-week high as investors grow more confident in its artificial intelligence strategy.

Microsoft stock was up $12.01, or 2.30%, at $534.62 on the Nasdaq as of 2:30 p.m. EDT. There was no immediate company announcement tied to Friday's move.

The gain leaves the stock below its 52-week high of $553.72, but well above the levels where it traded for much of this year, when concerns about the cost of Microsoft's AI build-out weighed on shares.

A busy week for Microsoft

Friday's advance followed a week in which Microsoft put its hardware and AI ambitions on display.

On Wednesday, the company held a Windows and Surface event in San Francisco, its first major Windows-focused showcase in more than two years, featuring CEO Satya Nadella, Windows and Devices chief Pavan Davuluri and Nvidia CEO Jensen Huang. Microsoft used the occasion to announce pricing and pre-orders for the Surface Laptop Ultra, a $2,599 15-inch laptop built around Nvidia's Arm-based RTX Spark chip and aimed at creators, developers and AI users.

While hardware is a small part of Microsoft's business compared with cloud computing and software, the launch underscored the company's push to bring more AI processing directly onto personal computers.

Copilot overhaul and analyst upgrade fueled earlier rally

The stock's recent climb gained momentum in late September. On Sept. 25, Microsoft shares rallied after the company unveiled new AI capabilities for its redesigned Copilot app. Copilot users gained access to the full functionality of Word, Excel and PowerPoint within the app, along with a new Home hub that combines Chat and Cowork, an AI tool designed to carry out multistep tasks.

The company also announced bigger volume discounts on Copilot enterprise subscriptions starting in October, a move aimed at speeding up corporate adoption.

The same day, Stifel analyst Brad Reback upgraded the stock to buy from hold and raised his price target to $575 from $530. Reback said he expects the new Copilot features to help Microsoft grow revenue at least at a mid-teens rate in the coming years, and expects efficiency gains in its Azure cloud platform.

Shares closed that Friday at $516.17. At Friday's intraday price, the stock is up about 3.6% from that level.

Strong results reshaped the narrative

Much of the turnaround in investor sentiment dates to Microsoft's fiscal fourth-quarter report in late July, which sent shares soaring 15% in a single session, the largest one-day increase in market value ever recorded for any company.

For fiscal 2026, Microsoft reported revenue of $331.8 billion, up 18%, while adjusted earnings per share rose 22% to $17.28.

The company's cloud business was the standout. Microsoft cloud revenue topped $214 billion in the fiscal year, up 27%, and Azure's annual revenue surpassed $100 billion after growing 41%.

Bank of America analyst Tal Liani said the results offered "increasing validation of Microsoft's AI strategy." Microsoft also said its Microsoft 365 Copilot AI product had more than 30 million paid seats.

Heavy spending remains in focus

Microsoft's AI investments come with a steep price tag. The company spent $41 billion on capital expenditures in the fiscal fourth quarter alone as it raced to add data center capacity.

Earlier this year, that spending fueled worries on Wall Street. Some investors questioned how quickly Microsoft could turn its massive AI infrastructure outlays into consistent profits, and others feared disruption from rival AI developers. Those concerns pushed the stock sharply lower in the first half of 2026.

Analysts who remain bullish argue that Microsoft is building capacity to meet demand that already exists, rather than spending in hopes that customers will arrive later.

High-profile investors stepped in

The stock's slump earlier in the year also drew prominent buyers. In May, Bill Ackman's Pershing Square Capital Management disclosed a new stake in Microsoft after selling its position in Alphabet. Ackman cited Microsoft's "highly compelling valuation" following the sell-off, along with its strength in cloud infrastructure and office productivity software.

Wall Street remains broadly positive on the stock. Morgan Stanley initiated coverage in July with an overweight rating and a $600 price target, while other firms have issued targets ranging well above the current share price.

Workforce changes

Microsoft has also been reshaping its workforce as it leans into AI. In July, the company announced plans to lay off about 4,800 employees, roughly 2.1% of its global workforce, according to a memo from chief people officer Amy Coleman.

Investors will look to Microsoft's fiscal first-quarter results, expected in the coming weeks, for evidence that demand for Azure and Copilot remains strong and that the company's heavy investments continue to pay off.

The pace of Azure growth, the trajectory of capital spending and early signs of Copilot adoption following the app's redesign are likely to be key areas of focus. A strong report could help the stock challenge its 52-week high, while any sign of slowing cloud growth could test the recent rally.