Microsoft Stock Hits Year-to-Date High as AI Momentum Reignites Investor Interest

Shares of Microsoft (MSFT) rose 3.66% on Friday, Sept. 25, to close at $516.17, their highest close of 2026 and the highest since November. The stock was also the best performer that day in the Dow Jones Industrial Average, the 30-stock index meant to represent the U.S. economy.

The gain capped a sharp recovery. Through July 28, Microsoft shares were down about 17% for the year. Since the company reported quarterly earnings in late July, they have risen 32%.

Why investors changed their view

Earlier in the year, Microsoft was caught up in the selloff in software stocks, as investors worried that AI could disrupt the business of established software companies. That concern has since eased for Microsoft in particular.

D.A. Davidson analyst Gil Luria told MarketWatch that Microsoft is "finally getting credit again for how well it is positioned to benefit from the growth of AI." His argument rests on how the company has positioned itself relative to the companies that build AI models.

Microsoft is not tied exclusively to any one of the large AI model developers. Instead, its software can serve as a base from which businesses use different AI models and agents for different tasks, a role known as an "orchestration layer." Luria said Microsoft has "wisely moved into" that position and is "helping their customers manage the frontier models in a more efficient and effective way" than other companies. Frontier models are the most advanced AI systems available.

The practical effect is choice. A company using Microsoft's tools can switch between frontier models depending on which one handles a particular type of work best, rather than committing to a single provider.

A new Copilot aimed at business users

On Friday, Microsoft released a new version of Copilot, its AI assistant designed to help customers get more out of the company's software. Luria said the release aims to "replicate Meta Muse's success for businesses," a reference to Meta Platforms' personal AI agent, which has gotten off to a fast start with consumers.

Microsoft's advantage, in Luria's view, is reach. "Microsoft is in a position to provide assistant services to its users as the main provider of software into millions of businesses," he said.

RBC Capital Markets analyst Rishi Jaluria said the release "is notable for what it signals about the evolving AI interface layer," the point at which users interact with AI systems. He noted that Microsoft is adding more tools for coding and financial operations.

Azure remains the core

Luria also expects growth in Azure, Microsoft's cloud-computing platform, to accelerate further. Azure is where much of the computing power behind AI services runs, so its growth rate is one of the main ways investors measure how much Microsoft is earning from AI demand.

Azure growth and Copilot adoption

• Microsoft's next quarterly report, and whether Azure growth accelerates as Luria expects.
• Adoption of the new Copilot among business customers, the measure of whether it can do for Microsoft what Muse has done for Meta.
• Whether the stock holds its gains after a 32% rise since late July.