Redmond, Washington-based Microsoft Corporation (MSFT) is a key player in the computer industry. The company develops and supports software, services, devices and solutions. With a market cap of $3.8 trillion, Microsoft offers applications, extra cloud storage, and advanced security solutions serving customers worldwide.

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and MSFT definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance within the software - infrastructure industry. The tech giant has made significant progress in the rapidly expanding generative AI industry, seamlessly incorporating it into its search engine and various productivity tools.

Despite its notable strength, MSFT slipped 8.2% from its 52-week high of $555.45, achieved on Jul. 31. Over the past three months, MSFT stock has gained 11.4%, outperforming the S&P 500 Index’s ($SPX) 10.4% gains during the same time frame. 

In the longer term, MSFT shares rose 20.9% on a YTD basis and 24.1% over the past 52 weeks, outperforming the SPX’s 10.6% surge in 2025 and 16.3% returns over the past year.

To confirm the bullish trend, Microsoft has been trading above its 50-day moving average since late April, with slight fluctuations. The stock is trading above its 200-day moving average since early May.

Microsoft's partnership with Shopify and impressive performance in the AI space have driven its outperformance in the market. The integration of Shopify's Checkout Kit into Microsoft's Copilot platform has enhanced user shopping experiences. MSFT’s strong focus on AI, cloud infrastructure expansion, and Office 365 Commercial demand has fueled growth in revenue and ARPU. The company's success in Azure, AI, and Copilot platforms showcases its dominance in the fast-growing cloud and AI markets. With Azure surpassing $75 billion in annual revenue and reaching 100 million monthly active users for its AI assistants, Microsoft's position as a leader in the AI transformation is evident. The company's accelerating growth, expanding margins, and leadership in the AI revolution point to a compelling investment opportunity for the future.

On Jul. 30, MSFT shares closed up by 4% after reporting its Q4 results. Its EPS of $3.65 topped Wall Street expectations of $3.35. The company’s revenue was $76.4 billion, topping Wall Street forecasts of $73.7 billion.

In the competitive arena of software - infrastructure, Oracle Corporation (ORCL) has taken the lead over MSFT, showing resilience with a 44.2% uptick on a YTD basis and 74.3% gains over the past 52 weeks.

Wall Street analysts are bullish on Microsoft’s prospects. The stock has a consensus “Strong Buy” rating from the 47 analysts covering it, and the mean price target of $622.85 suggests a potential upside of 22.2% from current price levels.