Microsoft (MSFT) Stock: Down 8% in Three Months as Wall Street Turns Bullish

TLDR

• Microsoft stock dropped 2.4% to $459.53, hitting its lowest point since May 2025.
• A KeyBanc survey shows IT spending will grow 5.3% in 2026, up from 4.6% in 2025.
• 30% of survey respondents expect public cloud spending to grow faster, a 17-point jump from the previous quarter.
• Microsoft signed a 12-year deal with Indigo Carbon to buy 2.85 million soil carbon removal credits.
• KeyBanc maintains an Overweight rating with a $630 price target on Microsoft stock.

Microsoft stock closed at $459.53 on Wednesday, down 2.4%. The price marks a seven-month low for the tech company.

Microsoft Corporation, MSFT

The stock has dropped 8% over the past three months. Market skepticism around software companies and AI investments has weighed on shares.

But a new KeyBanc survey suggests better days ahead. The poll of IT resellers shows customer budgets will grow 5.3% in 2026.

That’s up from 4.6% growth in 2025. Resellers are companies that buy IT products and bundle them with their own services.

The spending increase should benefit Microsoft’s Azure cloud unit. The company’s Copilot AI products are also expected to see higher demand.

Cloud Spending Accelerates

The survey revealed something interesting about cloud spending patterns. 30% of respondents expect customer spending on public cloud to grow faster.

That represents a 17-point increase from the third quarter. KeyBanc analyst Eric Heath called it “a tailwind for Azure that goes beyond GPUs.”

Multiple Copilot products are gaining traction. More survey respondents indicated Copilot piloting and production is underway.

KeyBanc maintains an Overweight rating on Microsoft. Their price target sits at $630 per share.

Goldman Sachs recently raised their target to $655. The firm pointed to Microsoft’s investments in Anthropic and its own AI models as positive diversification beyond OpenAI.

Questions remain about AI adoption speeds. The Information reported last month that Microsoft was easing sales quotas for enterprise AI products like Microsoft 365 Copilot.

Microsoft pushed back on that reporting. The company told Barron’s that aggregate sales quotas for AI products had not been lowered.

The KeyBanc survey shows steady increases in customers experimenting with AI. Those with GenAI rollouts in production remain in the low-to-mid-single-digit range.

Major Carbon Credit Purchase

Microsoft announced a separate deal this week focused on sustainability. The company signed a 12-year agreement with Indigo Carbon.

The deal covers 2.85 million soil carbon removal credits. These credits are tied to regenerative agriculture practices in the U.S.

Microsoft aims to become carbon negative by 2030. This marks the third transaction between Indigo and Microsoft.

The companies previously completed deals for 40,000 tons in 2024 and 60,000 tons in 2025. The credits come from Indigo’s Carbon by Indigo program.

Regenerative agriculture can remove more than 3.5 gigatons of carbon dioxide equivalent annually. The practices also improve soil health and increase crop yields.

Microsoft did not disclose financial terms. A source familiar with the deal told Reuters the value ranges between $171 million and $228 million.

The carbon credit purchase represents one of the largest soil carbon deals on record. The 12-year timeframe provides long-term support for regenerative farming programs.

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