Goldman Sachs Raises Microsoft Price Target to $480

Goldman Sachs analyst Kash Rangan raised the price target on Microsoft (NASDAQ: MSFT) to $480 (from $450) while maintaining a Buy rating.

“We reiterate our Buy rating while raising our PT to $480 (vs. $450 prior) following F3Q25 outperformance across all key metrics (see: First Take).

We leave increasingly confident in Microsoft’s ability to capture AI share while executing across their core businesses: 1) Azure accelerating to +35% at a $70bn+ scale.

We believe there is further room for improvement in non-AI workloads as Microsoft fine-tunes its at-scale motion and the need for AI drives increasing cloud migrations.

In Azure AI, we believe revenue growth can remain elevated through FY26, 2) Microsoft reiterated their FY26 CapEx guidance (as we expected) and indicated CapEx can grow directionally with Microsoft Cloud in the long-term.

However, CapEx growth is still likely to outpace Microsoft Cloud growth in the shorter-term as long-duration investments remain elevated.

We leave our FY26 CapEx estimate unchanged (+21%) reflecting the need for Microsoft to continue to invest in longer-duration assets to meet elevated demand, and 3) Ramping Copilot adoption, with users +3x yoy, record customers purchasing additional seats, and >230k organizations that have used Copilot Studio.

As investor focus shifts to FY26, we believe Microsoft can still deliver FCF +3% and EPS +17% despite an elevated CapEx profile, with Azure growth rate of 30%+.

We are, however, balanced in our view of the outlook, with the impact of potential tariffs, largely, not factored into guidance.

We continue to believe that as Gen-AI moves from the Infrastructure layer to the Platform/Application layers, Microsoft is well positioned to capitalize on this shift, wherein a more capital efficient and higher margin recurring revenue model could become a reality (similar to the on-prem to cloud transition).”

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