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Microsoft Stock Rises 1.5% After Analyst Upgrade

Microsoft2 min read4 sources

Why is Microsoft stock up today?

Microsoft (MSFT) stock rose 1.5% to $525.37 on Monday after Melius Research upgraded it to Buy with a $665 target, citing AI security demand, as the Nasdaq closed at a record.

Key numbers

Microsoft 1D move+1.5%close $525.37
Melius price target$665upgraded from Hold
Commercial backlog$678B+84% YoY
Azure growth+43%annual revenue above $100B
Nasdaq close27,477.31+1.05%, record
Forward P/E25xprice vs expected profit

What happened

Microsoft (MSFT) stock rose 1.5% to $525.37 on Monday after Melius Research upgraded it to Buy with a $665 target, citing AI security demand, as the Nasdaq closed at a record. Melius analyst Ben Reitzes argues that companies worried about AI risks will turn to Microsoft as the "adult in charge" of using AI safely. Microsoft also has $678 billion of customer contracts that have not yet turned into sales (its backlog), up 84% from a year ago. The Nasdaq gained 1.05% to 27,477.31 after weak jobs data eased fears of another Federal Reserve rate hike.

Why it matters

Microsoft is one of the world's largest companies, so a bullish call from an analyst firm can move many retirement and fund portfolios. The upgrade suggests worries about AI safety may push business customers toward established vendors rather than newer AI labs. Even so, the stock is up only 6.1% this year, versus 20% for the Nasdaq 100, and heavy data-center spending remains a risk.

Who this affects

Marketbullish
Medium impact
Tech investors gain as the Nasdaq hits a record.
Companybullish
Medium impact
Shareholders gain; Melius target implies roughly 26% upside.
Competitorsneutral
Low impact
Amazon and Alphabet barely moved in morning trading.
Industrymixed
Medium impact
AI security spending helps big vendors; huge capex raises costs.

Microsoft vs Alphabet, Amazon

MicrosoftMSFT+1.5%+6.1%25x
AlphabetGOOGL+0.2%——
AmazonAMZN-0.2%——
Nasdaq 100NDX—+20%—

As of 2026-10-05

How we got here

  1. Microsoft reports backlog up 84% to $678B and Azure growth of 43%.

  2. Weak September jobs data lowers expectations of a Fed rate hike this month.

  3. Melius upgrades Microsoft to Buy with $665 target; Nasdaq closes at record.

What to watch

  • Microsoft's next quarterly report: Azure growth versus 43% and spending near $175B.Late October 2026
  • Big bank earnings begin, starting S&P 500 profit season expected to show over 30% growth.2026-10-12
  • Federal Reserve October meeting decision on whether to raise interest rates again.October 2026

Educational content only. Not investment advice.

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