Microsoft (MSFT) Soars on Barclays AI Deal—Proof the Hype Was Real?

After years of vaporware promises, Microsoft’s AI bets finally deliver—and Wall Street scrambles to front-run the rally.

Barclays’ partnership lights the fuse: MSFT stock surges as skeptics eat crow. Turns out, throwing billions at OpenAI wasn’t just another tech vanity project.

Behind the numbers: Enterprise adoption hits critical mass. No more ’AI-powered’ PowerPoint gimmicks—real revenue streams emerge as corporations ditch consultants for Copilot subscriptions.

The cynical take: Of course banks are first in line. Nothing moves markets like other people’s money chasing the next shiny thing.

TLDR

• Microsoft secured a major AI deal with Barclays for 100,000 Copilot AI assistant licenses, joining other large corporate clients
• Microsoft stock has surged 16% in May, approaching record highs after being the worst Magnificent Seven performer in 2024
• Azure cloud business showed strong growth of 33% in the latest quarter, beating Wall Street expectations
• TD Cowen analysts project AI-related Azure revenue could reach $24 billion by fiscal 2026, up from $4 billion in 2024
• At $30 per user monthly pricing, these enterprise deals could generate tens of millions in annual revenue for Microsoft

Microsoft has landed a massive AI partnership with Barclays, securing 100,000 licenses for its Copilot AI assistants. The deal was announced during a company-wide town hall and represents major progress in corporate adoption of Microsoft’s AI tools.

BARCLAYS AGREES TO BUY 100,000 Microsoft COPILOT LICENSES

And $MSFT just pressing closer toward ATHs. $30 per license per month.

High margins. Software 🚀 pic.twitter.com/VsKOSjgR0C

— Samsolid (@samsolid57) May 29, 2025

Barclays joins an expanding list of enterprise clients using Copilot for over 100,000 employees. Other major adopters include Accenture, Toyota, Volkswagen, and Siemens.

At $30 per user per month, these enterprise deals could bring in tens of millions of dollars annually for Microsoft. However, large companies typically receive bulk discounts on these licensing agreements.

The Barclays deal comes as Microsoft stock surges toward record territory. Shares have jumped 16% in May alone, putting them within 2% of their all-time high reached last July.

This represents a dramatic turnaround for Microsoft stock. The company was the worst performer among the Magnificent Seven stocks in 2024, gaining just 12% while peers like Nvidia soared.

Azure Powers the Comeback

The recent rally has been driven largely by stronger-than-expected performance from Microsoft’s Azure cloud computing business. Azure revenue grew 33% in the latest quarter, beating Wall Street forecasts.

Azure’s sales include both AI services that power tools like ChatGPT and traditional cloud products like databases and storage. Microsoft’s CFO Amy Hood noted that non-AI businesses actually outperformed expectations in the most recent quarter.

TD Cowen analysts project AI-related Azure revenue will explode to $24 billion by fiscal 2026. That’s up from roughly $4 billion in fiscal 2024, representing massive growth potential.

The analysts raised their price target to $540 from $490, implying an 18% upside from recent levels. They maintained their buy rating on the stock.

Copilot Expansion Strategy

Microsoft is aggressively pushing Copilot adoption through large enterprise deals and customization options. The company launched Copilot Studio, allowing businesses to build custom AI assistants for specific needs.

Siemens uses AI-driven tools for manufacturing insights. Toyota leverages Copilot for supply chain optimization tasks.

Companies can tailor Copilot with plugins and Graph connectors to fit their specific business requirements. A retailer might create an AI-powered customer service chatbot while an insurance firm could develop automated claims processing tools.

Microsoft’s expansion strategy focuses on making Copilot a Core business tool across industries. The company is also investing heavily in user training and support to ensure successful implementations.

Of 72 analysts covering Microsoft, only 6 have hold ratings and none recommend selling. The consensus view remains strongly bullish on the stock’s prospects.

Microsoft trades at 30 times forward earnings, representing a premium to both the Nasdaq 100 and its own 10-year average. Some analysts see this as limiting near-term upside potential.

However, portfolio managers remain optimistic about Microsoft’s AI monetization strategy. The company appears well-positioned to profit from ongoing AI adoption across enterprise customers.

Microsoft’s recent sideways trading suggests the stock may need to consolidate before its next leg higher. The company reports that AI is becoming an increasingly large component of its overall revenue growth.