TLDR
- Microsoft stock dropped to $459.53 on Wednesday, the lowest price since late May 2025.
- IT spending will grow 5.3% in 2026 according to KeyBanc reseller survey, up from 4.6% in 2025.
- 30% of survey respondents expect faster public cloud spending growth, a 17-point quarterly increase.
- The company signed a 12-year deal for 2.85 million carbon credits valued at $171M-$228M.
- KeyBanc holds a $630 price target while Goldman Sachs rates shares at $655.
Microsoft closed at $459.53 Wednesday after dropping 2.4%. The price represents the stock’s lowest level in seven months.
Shares have declined 8% over the past three months. Software companies and AI-focused firms have faced selling pressure across the board.
But a KeyBanc survey of IT resellers offers a brighter picture. The data shows customer budgets will expand 5.3% in 2026.
That’s an acceleration from the 4.6% growth rate seen in 2025. The spending increase should benefit Microsoft’s Azure cloud platform and Copilot AI products.
KeyBanc analyst Eric Heath noted strong momentum in cloud spending expectations. 30% of survey participants predict faster public cloud growth.
That figure is up 17 percentage points from the third quarter. Heath called it “a tailwind for Azure that goes beyond GPUs.”
Copilot Gains Traction
More companies are moving beyond AI experimentation. The KeyBanc survey shows increased piloting and production of Copilot products.
KeyBanc rates Microsoft as Overweight with a $630 target price. Goldman Sachs recently set an even higher target at $655.
The Goldman analysts pointed to diversification as a key factor. Microsoft’s investments in Anthropic reduce dependence on its OpenAI partnership.
Questions about AI adoption speed continue to surface. The Information reported last month that Microsoft was lowering sales quotas for enterprise AI tools like Microsoft 365 Copilot.
Microsoft rejected that reporting. The company told Barron’s that aggregate AI product quotas remained unchanged.
The survey data shows most customers are still in early stages. Production deployments of generative AI stay in the low-to-mid-single-digit range.
But the trend line points upward. Each quarter brings more companies from experimentation to actual use.
Cloud Spending Outlook Improves
The 17-point jump in cloud spending expectations stands out in the survey results. Public cloud investments are accelerating beyond graphics processing units.
Azure should capture a meaningful share of this growth. The platform competes directly with Amazon Web Services and Google Cloud.
Microsoft’s cloud business has been a consistent revenue driver. The improved spending outlook supports the bull case despite recent price weakness.
Market skepticism has weighed on shares tied to OpenAI. Microsoft’s close relationship with the ChatGPT developer has created some investor concern.
The Anthropic investment helps address those worries. It shows Microsoft is building multiple AI partnerships rather than relying on one provider.
Indigo Carbon Partnership Expands
Microsoft finalized a 12-year agreement with Indigo Carbon for soil carbon removal credits. The deal covers 2.85 million credits tied to U.S. regenerative agriculture.
This marks the third transaction between the companies. Previous deals included 40,000 tons in 2024 and 60,000 tons in 2025.
The agreement supports Microsoft’s carbon negative target for 2030. Regenerative farming can remove over 3.5 gigatons of carbon dioxide equivalent annually while improving soil health.
A source familiar with the transaction told Reuters the value ranges from $171 million to $228 million. Microsoft declined to confirm pricing details.
