Microsoft’s (MSFT) consistent cloud momentum, led by Azure and AI-powered services, continues to position the tech giant as a standout in growth and stability. Amid market volatility, its cloud business not only delivers strong revenue and margin performance but also underscores the company’s ability to balance innovation with resilience.
Let’s take a look at key metrics from Microsoft’s latest results that highlight the performance of its cloud business.
Key Metrics for Microsoft Cloud Business
According to Main Street Data, Microsoft generated $42.4 billion in cloud revenue for the quarter ending March 2025, marking a 20% year-over-year increase. This accounted for 60.9% of the company’s total revenue. Over the last few years, Microsoft’s cloud revenue has steadily increased, showing how well the company is capitalizing on the high demand for Azure and other cloud tools.
On the profitability side, Microsoft’s cloud business remains highly profitable, with a solid gross margin of 69%. However, that’s down slightly from its peak margin of 73% in 2022. This dipped mainly because of heavy investments in expanding its AI infrastructure.
Wall Street Stays Optimistic on Microsoft Cloud
Saiyi He of CMB International Securities recently raised the price target on MSFT stock from $503 to $510 while maintaining a Buy rating. The five-star-rated analyst highlighted the company’s strong performance, driven by robust growth in cloud services, especially Azure. The analyst also noted that demand for AI-related cloud offerings continues to outpace the expansion of data center capacity, signaling sustained growth ahead.
Meanwhile, Trust Financial’s top-rated analyst Joel Fishbein reiterated his Buy rating at a price target of $600, predicting an upside of 38.5%. He noted that Microsoft delivered strong Q3 2025 results, with Azure growth exceeding the high end of expectations. Fishbein believes the momentum in AI could support a sustained acceleration in Azure growth as more capacity becomes available in fiscal 2026.
What Is the Target Price for MSFT?
According to TipRanks, MSFT stock carries a Strong Buy rating from analysts based on 30 Buys and five Holds assigned in the last three months. At $506.31, Microsoft share price forecast implies an upside of 17% from current levels.
