Wells Fargo has trimmed its price target on Microsoft to $625 from $650, though it retained an Overweight rating ahead of the software giant’s fiscal fourth-quarter earnings report on July 29. The new target still implies over 60% upside from a reference price of $384.93.
The firm cited robust Azure momentum, noting that constant-currency growth is tracking near 41%—slightly above the 39–40% guidance—and expects the pace to hold steady into the first fiscal quarter. Microsoft 365 Copilot checks also came in upbeat, with partners reporting mid-to-high single-digit adoption across their customer seat bases. Wells Fargo now projects at least 26 million Copilot seats, implying more than five million net additions during the quarter.
Despite the positive demand signals, rising capital expenditure dampened the price target. Wells Fargo raised its outyear capex assumptions, forecasting about $45 billion per gigawatt in fiscal 2027 and 2028, and warned that cost per gigawatt could continue climbing. Higher depreciation may pressure fiscal 2027 operating margins by roughly 50 basis points.
Other Wall Street firms also adjusted their targets: Citi cut to $570 from $620 (Buy), Mizuho lowered to $490 (Outperform), while Evercore ISI bucked the trend by raising its target to $525 from $510 (Outperform). Consensus estimates for the quarter stand at earnings of $4.24 per share and revenue of $86.66 billion.
