Microsoft Shares Surge Ahead of Earnings Despite UBS Target Cut and Outage

Microsoft shares saw a notable increase on January 24, 2026, rising by 3.3% to close at $465.95. This uptick reflects a positive sentiment as the company approaches its fiscal second-quarter earnings announcement scheduled for January 28.

Market Reactions and Analyst Insights

Despite UBS lowering its price target for Microsoft from $650 to $600, the firm upheld a “Buy” rating. This demonstrates confidence in Microsoft’s growth potential, particularly with Azure’s expansion, including the upcoming launch of their Fairwater AI data centers in Wisconsin.

Cantor Fitzgerald also adjusted its price target, reducing it from $639 to $590, though it retained an “Overweight” rating. Analyst Thomas Blakey highlighted positive prospects for AI demand, Azure, and Copilot adoption.

• UBS: Price target decreased to $600.
• Cantor Fitzgerald: Price target lowered to $590.
• Morgan Stanley: Maintained an “Overweight” rating with a price target of $650.

Azure Growth Expectations

Investors are keenly observing Azure’s performance, with a projected revenue growth of 37% this quarter, down slightly from 40% in the previous quarter. Analysts emphasize Azure’s significance as a key driver of Microsoft’s revenue, especially in light of recent service outages that affected platforms like Outlook and Microsoft Purview.

Impact of Service Outages

Microsoft recently faced a significant challenge with an outage affecting Microsoft 365 services. Issues persisted until full access was restored, leading to widespread disruptions. Reports indicated peak outage incidents at 15,890, which dropped to 113 by early Friday morning.

Market Landscape and Upcoming Challenges

The current market landscape is fraught with uncertainty, particularly with numerous earnings reports and a critical Federal Reserve policy decision approaching. As Chris Galipeau from Franklin Templeton remarked, earnings are essential for investors seeking clearer indicators of AI investments translating into revenue growth.

As the market prepares to reopen on Monday, scrutiny will fall on Microsoft’s ability to meet the high expectations surrounding Azure’s performance and the overall health of the company. The upcoming days are crucial, with the Fed’s announcements and Microsoft’s earnings report expected after the close of the market.