Wells Fargo Maintains Outperform on Microsoft (MSFT) Despite Lowered Target

Microsoft Corporation (NASDAQ:MSFT) is among the best software infrastructure stocks to buy according to hedge funds. On Thursday, January 8, Wells Fargo trimmed its price target on the stock from $700 to $665 while maintaining its Outperform rating, according to The Fly.

The revision followed the publication of Wells Fargo’s software-sector update for 2026, in which the analyst team argued that AI will remain “the name of the 2026 game”. They highlighted that investors can capitalize on opportunities in the AI landscape across three primary areas: infrastructure providers, established incumbents, and innovation-led platforms. While the firm expects variability in adoption trends, the underlying secular drivers are expected to underpin performance through 2026.

Earlier in the week, Jefferies analyst Brent Thill also reiterated his Buy rating and $675 price target on Microsoft Corporation (NASDAQ:MSFT), citing the company’s efforts to integrate AI across its product portfolio as a major growth catalyst. In a broader note on the software sector, Thill argued that “2026 will be another year of gradual AI monetization,” and that he sees “ample room for multiple expansion once AI monetization begins to lift growth.” In the mega-cap space, Microsoft and Meta were Jefferies’ top picks.

Microsoft Corporation (NASDAQ:MSFT) develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide.

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.