By Khac Phu Nguyen
Publication Date: 2026-08-10 19:37:00
This article first appeared on GuruFocus.
Microsoft (NASDAQ:MSFT), the software and cloud giant behind Azure, reported accelerating cloud growth just as Wall Street gets more comfortable with the biggest question hanging over the AI boom: Are those staggering infrastructure bills actually paying off? Microsoft shares climbed roughly 1.7% Monday morning, and JPMorgan sees the answer increasingly tilting toward yes. The bank pointed to Microsoft, Alphabet (NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) as evidence that hyperscaler AI spending is feeding into stronger revenue, helping drive its 2026 year-end S&P 500 (SPY) target to 8,000 from 7,800.
The bull case is starting to get some muscle behind it. JPMorgan lifted its S&P 500 earnings estimate to $365 per share for 2026 and $420 for 2027, up from $350 and $390. Stronger cloud growth, expanding backlogs and improving cash-flow visibility across the hyperscalers helped fuel that confidence. Microsoft is…
