DA Davidson has reaffirmed a Buy rating on Microsoft Corp. and left its price target unchanged at $650.00 in the wake of the company’s fiscal 2Q26 earnings release. The price target, measured against a reference share price of $481.63, implies approximately a 35% potential upside. Across the analyst community, published targets for Microsoft span from $450 to $730.
The research note highlighted that Microsoft posted a quarter that surpassed expectations on both the top and bottom lines. The company, with a reported market valuation of $3.58 trillion, registered a positive market response in recent trading, with shares advancing 6.76% over the prior week, according to InvestingPro data.
DA Davidson emphasized continued strength in Microsoft’s cloud business. Azure grew 38% year-over-year in the quarter, a rate that remains healthy but that the firm described as a modest deceleration relative to earlier periods. That cloud performance contributed to a reported 15.59% increase in revenue over the trailing twelve months.
Management commentary cited by the firm noted that Azure growth remains constrained by available compute capacity versus customer demand. The note also drew attention to internal trade-offs Microsoft faces when prioritizing how limited computing resources are allocated across its different business segments.
Other firms reacted to the quarter with a range of adjustments to their views and targets. KeyBanc lowered its price target to $600, citing a less inspiring outlook for the coming quarter tied to Azure trends. Raymond James trimmed its target to $580 while retaining an Outperform rating after noting Azure growth and guidance were slightly below investor expectations.
By contrast, Truist Securities reiterated a Buy rating and set a $675 price objective. Truist pointed to material strength on the commercial side, reporting that bookings rose by more than 230% year-over-year and that commercial remaining performance obligation reached $625 billion, signaling broad-based demand across Microsoft’s customer base.
Microsoft’s reported GAAP earnings per share for the quarter were $4.14, ahead of a consensus expectation of $3.93. Revenue for fiscal 2Q26 came in at $81.3 billion versus an anticipated $80.23 billion. These results underline the near-term financial outperformance, even as some analysts express caution about the pace of cloud expansion.
The mix of analyst reactions to the quarter reflects both the strength of Microsoft’s commercial momentum and the uncertainty tied to Azure’s capacity-constrained growth. Some firms reduced near-term targets and tempered guidance expectations, while others maintained or raised targets in recognition of durable enterprise demand.
Investors and market participants appear to be balancing those opposing signals as they assess valuation and growth trajectories for one of the largest technology companies by market capitalization.