Microsoft (MSFT): Can edge AI drive the company's market value to $5 trillion?

Microsoft (NASDAQ: MSFT) achieved tremendous success in 2025, with the company's market capitalization reaching 4 trillion USD and its stock price rising 12% year-to-date. Although the stock price has pulled back since reaching an all-time high in November, Wall Street still sees a bright future ahead. The main reason for this optimism lies in the success of Microsoft's edge artificial intelligence and Azure cloud computing platform. These two technologies complement each other, benefiting from Windows developers' investments in the AI field, which have already yielded significant returns.

Microsoft's latest Edge browser update (Stable version v143, released in December 2025) mainly focuses on improvements in security, privacy, and ease of use. This update delighted Microsoft investors and pushed the stock price up slightly. Last month, Microsoft also signed a new cooperation agreement with INBRAIN Neuroelectronics, aiming to apply its AI technology in the medical field. INBRAIN is developing a series of graphene-based neurotechnologies and is seeking support from Microsoft's agent AI tools.

These AI-focused initiatives have led several Wall Street experts to predict that the company's market capitalization will reach a new all-time high. "As the AI revolution enters its next growth phase, Microsoft's market cap will reach 5 trillion USD in 2026," said Wedbush Securities analyst Dan Ives. According to Yahoo Finance, Microsoft's current market capitalization is 3.59 trillion USD.

In addition, Microsoft has successfully transformed and entered the cloud computing field through Azure. Azure is one of the leading cloud service providers, experiencing rapid growth and serving as a key driving force for this technology. Azure's revenue growth has now surpassed its core traditional businesses, such as Windows and Office. Therefore, Microsoft stock is more likely to remain strong on the charts thanks to its robust performance.

As of press time, Microsoft (MSFT) stock is trading in the middle of its 52-week range, above its 200-day simple moving average. Despite overall weak market sentiment, bulls still dominate the outlook for Microsoft stock. Among the 62 analysts surveyed by CNN, none recommend selling Microsoft stock. 98% of analysts recommend buying, while the remaining 2% suggest holding. In addition, several Wall Street analysts, including Bernstein, Evercore ISI Group, and Raymond James, have given Microsoft stock an "outperform" rating. The target price range is between $600 and $650, indicating strong market confidence in further upside for Microsoft's stock price. If these targets are achieved, Microsoft's market capitalization could easily surpass 5 trillion USD next year, or even higher.