Is Microsoft Corporation (MSFT) The Most Profitable Software Stock to Buy Now?

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Is Microsoft Corporation (MSFT) The Most Profitable Software Stock to Buy Now?

Rameen Kasana

Thu, February 19, 2026 at 2:42 PM GMT+9 2 min read

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  •                                       StockStory Top Pick 
    

    MSFT

    +0.69%

Microsoft Corporation (NASDAQ:MSFT) is among the most profitable software stocks to buy now. As of February 13, Microsoft Corporation (NASDAQ:MSFT) is a consensus buy with 92% of analysts covering the stock rating it Buy, and the remaining 8% neutral. While the median price target of $600 reflects an upside potential of 49.51%, the highest and lowest price targets translate to an upside potential of 81.90% and a downside potential of 2.32%.

Earlier on February 9, Melius Research downgraded Microsoft Corporation (NASDAQ:MSFT) to Hold from Buy and trimmed the price target to $430. The firm raises concerns about the company’s ability to remain competitive in AI without substantially increasing capex, adding that these investments are required to compete with rivals.

Goldman Cuts Microsoft (MSFT) Target after Earnings, Keeps Buy Rating

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According to the analyst, Microsoft Corporation (NASDAQ:MSFT) could face execution and earnings management challenges if it doesn’t increase spending. Indeed, this would harm the company’s outlook, the firm asserted. Melius also pointed out valuation concerns, saying that the giant appears expensive based on their revised free cash flow forecasts.

Microsoft Corporation (NASDAQ:MSFT) is a Washington-based company operating through Productivity and Business Processes, Intelligent Cloud, and Personal Computing segments. Founded in 1975, the company provides software, services, devices, and solutions worldwide.

While we acknowledge the potential of MSFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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