Wedbush Securities analyst Dan Ives says investors are overlooking Microsoft, predicting that MSFT will eventually rally as the monetization phase of AI kicks in over the coming months.
The News
In a new CNBC interview, Ives says Microsoft is taking positive steps to look after its developers while witnessing meaningful growth in Copilot seats and Azure.
Ives says he has assigned an “outperform” rating to MSFT with a $575 target, potentially over the next six to 12 months.
“They’re defending their turf. They’re going after developers. And that’s really front and center in this arms race that we’re seeing play out. And I think these are the important steps, not just on Copilot and Build, but what ultimately will be Azure. And that’s why I think right now the market is mispricing Microsoft to what I believe is still going to be the monetization phase that’s going to happen in the next six to 12 months.”
During the Microsoft Build 2026 developers conference, the tech giant unveiled new AI agents and coding tools in a pitch to developers.
Ives also believes that the AI trade is a long-term investment cycle and that investors should brace for periods of “ebbs and flows.”
“Obviously, there are some concerns out there, but it’s my view we’re still in the third inning of the AI revolution relative to where there’s not any games going in. We could definitely have some ebbs and flows in this market. But when you look at Alphabet’s position, they are front and center. They’re at the top of the mountain right now.
Amazon has narrowed the gap. Microsoft, I think, is doing a lot of great things in terms of Azure. But look, we can’t think about weeks or months. We’re talking about years. We’re talking about the fourth industrial revolution in terms of what they’re going after.”
What It Means for Investors
Taking a close look at the numbers, Ives appears to be highlighting details about Microsoft that many investors are missing. The latest earnings report from the tech giant shows Azure and other cloud services revenue soared 40% year-over-year. Meanwhile, Microsoft Cloud revenue hit $54.5 billion, accounting for over 65% of its $82.9 billion quarterly revenue.
As for Copilot, Microsoft CEO Satya Nadella shared data during the latest earnings call to dispel the widespread notion that no one is using the AI tool.
“In knowledge work, it was another record quarter for Microsoft 365 Copilot seat adds, which increased 250% year-over-year, representing our fastest growth since launch. Quarter over quarter, we continue to see acceleration and now have over 20 million Microsoft 365 Copilot paid seats. The number of customers with over 50,000 seats quadrupled year-over-year. And Accenture now has over 740,000 seats – our largest Copilot win to date. And Bayer, Johnson & Johnson, Mercedes, and Roche all committed to 90,000 or more seats. Copilot is uniquely valuable at work, where nearly every task depends on organizational context.”
Looking at MSFT’s chart, the stock appears to have broken out of an inverse head-and-shoulders pattern on the daily chart, with a measured move at $490.
In technical analysis, the breakout suggests that MSFT is in an uptrend, unless it falls below the pattern’s neckline or prints a new reversal pattern.
Overall, the fundamental and technical signals appear to be aligning for Microsoft. While the technicals suggest that MSFT has a price target of $490, time will tell whether MSFT will hit Ives’s target of $575.
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