Microsoft (MSFT) Makes the 10 Best Dow Stocks for 2027 List as Azure Growth Speeds Up Maham Fatima Sun, November 8, 2026 at 12:36 PM EST 4 min read MSFT ^DJI ^GSPC ^IXIC Trade MSFT on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published a list of the 10 Best Dow Stocks to Buy for 2027 and Microsoft (NASDAQ:MSFT) ranked 10th on this list.
Yahoo Finance reported on November 5 that the Dow Jones Industrial Average tumbled 3.4%, or more than 1,800 points, while the S&P 500 fell 4.4% and the Nasdaq Composite sank 5.5% into correction territory. Chip stocks took the brunt of the damage, with AI chip designers and memory makers among the hardest hit. The slide erased the gains from a day earlier, when the Dow had jumped 3% for its best session of 2026 after Democrats won control of both chambers of Congress, Yahoo Finance wrote on November 4. By mid-session Thursday, the index was heading for its worst second day after a midterm election in data going back to 1896, the outlet noted.
For most of the week, the Dow had looked like the sheltered corner of the market. Yahoo Finance reported on November 2 that the Dow edged up 0.4% while the Nasdaq dropped roughly 1% as investors rotated out of technology names and into consumer cyclical and financial services shares, which left the Dow looking like the market's relative winner. On Thursday, that cushion gave way, as the focus turned to what a Democratic Congress could mean for the AI buildout, and for the data centers driving it in particular. You might also be interested in reading our piece on how the AI chip leader's growth compares with the cloud software giant's.
The reversal was fast and violent. Shay Boloor, chief market strategist at an equity research firm, pointed out that the VIX volatility index posted its biggest one-day jump in more than two years. It took the Nasdaq just six minutes on Thursday to erase its entire post-election rally, and even Wednesday's winners such as the iPhone maker turned lower. That Wednesday buying had been helped by falling oil prices, while the Windows maker jumped 6% to a record high.
Friday brought a partial rebound. Yahoo Finance reported on November 6 that the US added 165,000 jobs in October, and the Nasdaq gained 1.9% while the S&P 500 rose 1% and the Dow added 0.1%. For a closer look at one of the biggest AI spenders caught in the sell-off, we recently covered why the search giant's low price-to-earnings ratio can mislead. The stronger jobs data lifted Treasury yields and kept Federal Reserve policy at the center of market attention, Reuters reported on November 6, as the price-weighted index of 30 major US companies held roughly flat.
Microsoft made the list with an average upside potential of 19%, based on analysts' average price target. It has short interest of 0.90% and had 273 hedge fund holders in Q2 2026.
Microsoft's cloud engine is speeding up from an already enormous base. Azure revenue grew 48% in the fiscal first quarter, ahead of the company's own forecast, even though some third-party data center capacity arrived late. Management guided Azure growth of 49% to 50% for the fiscal second quarter, and Chief Financial Officer Amy Hood said customer demand continues to exceed available supply.
Analysts took the report as proof that AI spending is turning into revenue. On October 29, TD Cowen's Derrick Wood raised his Azure growth estimate for fiscal 2027 and lifted his price target to $650 from $625. William Blair's Jason Ader said the results reinforced his view that the AI thesis is playing out across both the infrastructure and application layers. BofA's Tal Liani reiterated a Buy rating and argued that Microsoft's reach across infrastructure, AI models and software gives it several ways to earn money from AI demand.
Contracted demand adds a cushion, since commercial remaining performance obligation, a gauge of revenue already signed, reached $677 billion. That backlog, plus efficiency gains that squeeze more revenue from existing GPU and CPU capacity, is why bulls see cloud growth holding up while new capacity arrives late.
Read our analysis on Microsoft (NASDAQ:MSFT) here: Microsoft (MSFT) Built a $100B Azure. Can It Outrun Its Own Spending?
While we acknowledge the risk and potential of MSFT as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than MSFT that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock.
READ NEXT: Nvidia Is Becoming More Than a Chipmaker. Can it Sustain Its Exceptional Margins? and Amazon vs. Alphabet: Is GOOGL's Cloud Growth Being Undervalued?
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