Guggenheim Upgrades Microsoft’s Rating to ‘Buy’

Guggenheim analyst John DiFucci upgraded on October 27, 2025, Microsoft from ‘Neutral’ to ‘Buy’ with a price target of $586.

“In a time when investors struggle to separate AI beneficiaries from AI casualties, it’s clear to us that Microsoft, along with the other hyperscalers, is a beneficiary.

That’s referring to the benefits to Azure, but we believe Microsoft has a near monopoly in the Productivity Suite market with its Office offering and therefore has been, and will be able to continue to directly monetize AI offerings (namely Copilot) tied to that product suite.

Finally, we believe Windows is also set to outperform consensus numbers over the near to medium term, and this second monopoly likely still contributes close to 20% of Microsoft’s profit, though it’s only about 10% (before re-segmentation in FQ24) of total revenue.

To be clear, this is not a call based on field checks into the quarter.

Anyone who claims to be able to make such a call is likely overestimating the certainty with which it can be done.

But the numbers appear set up well following the exceptionally strong quarter registered in F4Q25, and we believe the company is set up well to outperform for the rest of this year.”

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