Microsoft Corporation (MSFT) Down More Than 12% Since Q1 2026 Results

​Microsoft Corporation (NASDAQ:MSFT) is one of the Best Cloud Stocks to Buy Now. Microsoft Corporation (NASDAQ:MSFT) has declined more than 12.8% since its fiscal Q1 2026 results. However, Wall Street maintains a positive outlook on the stock. On November 20, Gregg Moskowitz from Mizuho Securities reiterated a Buy rating on the stock with a $640 price target. On the same day, Karl Keirstead from UBS also maintained a Buy rating on the stock with a $650 price target.

​Analyst Keirstead sees strong revenue growth prospects for Azure in 2026, driven by new AI capacity. He also highlighted that the stock currently trades at a forward multiple of 42 times free cash flow and 25 times non-GAAP earnings per share. The price target of $650 is based on the anticipation that Microsoft Corporation’s (NASDAQ:MSFT) 2027 free cash flow multiple will be 50x. Keirstead notes that this valuation will appear reasonable if Azure sustains growth in the high 30% to low 40%, along with non-GAAP EPS growth of 20% to 25%.

​In other news, on November 18, Microsoft Corporation (NASDAQ:MSFT) announced a new strategic partnership with NVIDIA and Anthropic aimed at scaling the Claude AI model on Microsoft Azure. Management noted that Anthropic has agreed to purchase $30 billion worth of Azure compute capacity with the aim of contracting additional one gigawatt capacity. Moreover, Microsoft Corporation (NASDAQ:MSFT) also aimed to invest more than $5 billion in Anthropic as part of the partnership.

​Microsoft Corporation (NASDAQ:MSFT) is a leading technology company known for a wide range of devices, software, and services. Some of the core offerings by the company include productivity software, including Microsoft Office and Azure, the Windows operating system, and gaming devices.

While we acknowledge the potential of MSFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.