Microsoft Stock Rises Before Earnings Despite UBS Target Cut and Ongoing Outage

On January 24, 2026, Microsoft shares experienced a notable increase, rising by 3.3% to close at $465.95. This significant uptick sets a positive tone for the company’s outlook as it approaches its fiscal second-quarter earnings announcement scheduled for January 28.

Market Reaction and Analyst Forecasts

Despite a reduction in UBS’s price target for Microsoft from $650 to $600, the firm maintained a “Buy” rating. They emphasize the potential growth of Azure, especially with the ongoing rollout of Microsoft’s Fairwater AI data centers. The Wisconsin facility is projected to launch in the first quarter of this year.

Similarly, Cantor Fitzgerald adjusted its price target from $639 to $590, while keeping an “Overweight” rating. Analyst Thomas Blakey reported positive indicators for AI and Azure demand, along with Copilot adoption.

• UBS: Price target reduced to $600.
• Cantor Fitzgerald: Price target lowered to $590.
• Morgan Stanley: Maintained Overweight rating with a $650 target.

Azure Growth Expectations

Investors are closely watching Azure’s performance, with an expected revenue growth rate of 37% this quarter, slightly down from the previous 40%. Analysts emphasize the importance of Azure as a key revenue driver, particularly in light of Microsoft’s recent service outages affecting platforms like Outlook and Microsoft Purview.

Impact of Service Outages

The recent Microsoft 365 outage was a notable challenge. Services were disrupted, causing widespread issues until access was fully restored. By Friday morning, reported incidents of outages dropped significantly.

• Peak incidents on Downdetector: 15,890.
• Incidents reduced to 113 by 1:05 a.m. ET on Friday.

Market Landscape and Upcoming Challenges

The overall market faces uncertainty with a series of earnings reports and a critical Federal Reserve policy decision on the horizon. As Chris Galipeau from Franklin Templeton noted, earnings are crucial as investors seek more definitive indicators of AI investments translating into revenue growth.

With the market set to reopen on Monday, scrutiny remains on Microsoft’s ability to deliver results that meet the high expectations surrounding Azure’s growth and overall corporate health. The next few days will be vital, especially with the Fed’s announcement and Microsoft’s earnings report set for release following the market’s close.