Microsoft's software offers capabilities that will be critical for AI, one analyst notes

Microsoft's stock is benefiting from positive sentiment around an Anthropic-Salesforce partnership, an analyst says.

Microsoft's stock just sealed its longest stretch of gains in 10 months, underscoring how much it's come back into favor as the software sector proves it hasn't been left for dead in the artificial-intelligence era.

Shares of Microsoft (MSFT) have climbed 30% in the past month, reflecting both a strong positive reaction to earnings released in July as well as improved sentiment toward the software sector following upbeat results from peers and competitors.

And on Friday, Microsoft's stock notched its sixth-straight session of gains - rising 6.7% over that multiday period - cementing its longest winning streak since Oct. 28, 2025, according to Dow Jones Market Data.

D.A. Davidson analyst Gil Luria told MarketWatch that Anthropic's announcement of an expanded partnership with Salesforce, dubbed "Claudeforce," has proven a halo over Microsoft's stock as well.

The partnership has helped investors realize that "Microsoft is in an even better position than Salesforce for providing orchestration and harnesses," he said, referring to two ways AI models are integrated into existing enterprise technology stacks.

The "orchestration layer" refers to the "coordination of different AI models, agent deployment and workflows," which he says Microsoft's Copilot AI assistant performs well, he wrote in a previous note. Meanwhile, "harnesses" refer to the process of "providing the AI model with access to non-AI software and capabilities," thus enabling agents to execute tasks, he wrote.

Luria said that Microsoft has now countered the negative narratives that were plaguing its stock earlier this year.

When the company reported an acceleration in Azure cloud-computing growth in its last report, and signaled potential spending moderation, the company helped dispel the view that its AI efforts aren't delivering a return on investment.

See also: Why every tech giant wants to look like a cybersecurity company in the AI era

StoneX analyst Yi Fu Lee told MarketWatch that Microsoft's recent stock performance is being bolstered by growing confidence among investors that the company can monetize AI beyond the cloud - through areas like Copilot and the GitHub coding assistant, for instance.

He also noted that strong revenue growth from competitors Google Cloud (GOOGL) (GOOG) and Amazon Web Services (AMZN) reinforced that there's broadly healthy demand in the enterprise cloud market. Neocloud providers like CoreWeave (CRWV) and Nebius Group (NBIS) have posted results that send a similar message.

Those results all lend credence to Microsoft's commentary that "customer demand for AI and cloud services continues to exceed available capacity," he said.

"Said simply, demand across AI infrastructure continues to outstrip available supply," Lee said.

-Hannah Pedone