Stifel Raises Microsoft Price Target to $500

Stifel analyst Brad Reback raised the price target on Microsoft (NASDAQ: MSFT) to $500 (from $475) while maintaining a Buy rating.

“After a few rocky quarters, Microsoft returned to form, posting a strong print across the board.

Most importantly, Azure growth was 300bps above the high end of guidance, driven by enterprise strength in the non-AI business, modest improvement in the recently troublesome scale motions, and robust AI contribution (+~170% Y/Y) as some capacity came on-line faster than expected, although given increased demand management does not expect to reach AI Supply/Demand equilibrium until FY26.

Beyond the top-line, management’s ability to manage OPEX remains astounding as Y/Y expenses only increased 3% CC on 2% headcount growth (down Q/Q).

With 230K employees and senior management’s relentless focus on efficiency we expect this trend to continue, especially as the company moves to absorb the gross-margin impacts from its capex investments.”

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