Was Jim Cramer Right About Microsoft (MSFT)?
108min read In the ever-shifting landscape of tech investing, few figures loom as large as Jim Cramer, whose bullish and bearish calls often stir markets. Over the past five years, Cramer’s stance on microsoft (MSFT) has oscillated between skepticism and optimism, reflecting the company’s own journey through AI challenges, cloud dominance, and strategic pivots. Was he right? Let’s dissect his predictions through the lens of data and outcomes.
The Bearish Years: 2020–2023—Cramer’s “Abysmal” Critique
Cramer’s early criticism of Microsoft centered on its perceived struggles in the AI race and slowing cloud growth. By late 2023, he labeled MSFT stock “abysmal,” citing paused data center projects in Ohio and Azure’s decelerating revenue growth. His skepticism was amplified by Microsoft’s breakup with OpenAI and the underwhelming rollout of its AI tools like Copilot.
The data shows MSFT underperformed, down 7.5% year-to-date in 2023, as investor doubts about its AI trajectory took hold. Cramer argued that the market was right to penalize Microsoft for its strategic missteps, such as the Ohio data center pause, which he called a “wrecked” narrative for the sector.
However, he acknowledged Microsoft’s resilience in the face of tariffs and macroeconomic headwinds. Its Office software and cloud dominance insulated it from broader declines, even as its valuation lagged peers like NVIDIA.
The Turnaround: 2024–2025—Azure’s Resurgence and Cramer’s Buy Call
By mid-2024, Cramer’s tone shifted. Microsoft’s Q2 2025 earnings revealed Azure’s 19% YoY revenue growth, a figure he called a “blowout” that drove MSFT’s stock up nearly 9% overnight. His February 2025 “Buy” recommendation, alongside Tesla and Starbucks, underscored his belief in Microsoft’s long-term potential.
Azure’s resurgence was key to this reversal. Cramer noted that over 279 hedge funds held MSFT shares, a testament to institutional confidence. Analysts at CMB International set a $503.10 price target, citing Azure’s $40 billion data center investments and partnerships with AMD/Nvidia to boost performance.
Yet, Cramer’s optimism came with caveats. He questioned Microsoft’s ability to monetize AI quickly, particularly in consumer markets, and warned that its success hinged on Azure’s sustained growth and Copilot’s enterprise adoption.
The Debate: Dependency on OpenAI vs. Azure’s Independence
A central point of contention was Cramer’s claim that Microsoft’s value was tied to its OpenAI partnership. Critics countered that Azure’s 24% global cloud market share and Copilot’s tenfold adoption by Fortune 500 companies (70% penetration) proved Microsoft’s AI ecosystem could thrive independently.
The data supports both sides: Azure’s growth rebounded post-2024, but Copilot’s revenue contributions ($10 billion over five years, per Melius Research) remain nascent. Cramer’s warning about dependency was partially valid, but Azure’s scale provided a buffer.
The Bottom Line: Where Cramer Was Right—and Wrong
- Right on Near-Term Challenges:
His early criticism of Azure’s slowdown and data center pauses was prescient. MSFT’s stock languished until 2025, and Copilot’s consumer uptake was indeed weak.
Wrong on Long-Term Potential:
While Cramer questioned Microsoft’s AI monetization, Azure’s growth and Copilot’s enterprise traction (365 Copilot ROI estimates of 132–353% for SMBs) proved its staying power.
Correct in Timing Buys:
- His February 2025 “Buy” at $412 (with a $505 target) was spot-on. By late 2025, MSFT had surged 19% YTD, hitting $493—a 20% gain from his recommendation.
Conclusion: A Nuanced Victory for Cramer
Jim Cramer was both right and wrong about Microsoft. His bearishness from 2020–2023 captured the stock’s underperformance and strategic missteps, while his 2025 optimism aligned with Azure’s comeback. However, his OpenAI dependency thesis overstated the risks, as Microsoft’s broader AI ecosystem (Copilot, healthcare tools) provided resilience.
Crucially, the data confirms his overarching thesis: Microsoft is a long-term winner, but its stock rewards investors who buy during dips. Since 2020, MSFT has delivered a 48% six-month gain (as of late 2025), with Azure driving $25.5 billion in cloud revenue. While Cramer’s warnings about AI profitability were valid in the short term, Microsoft’s fundamentals—34% ROE, $69.6 billion in total revenue—support his bullish stance for the next decade.
In the end, Cramer’s legacy on MSFT is clear: a skeptic who saw the risks, but ultimately bet on the company’s core strengths—and won.
Ask Aime: Did Cramer's calls on Microsoft predict the stock's growth?
