Goldman Sachs Keeps $630 Price Target on Microsoft
Goldman Sachs analyst Kash Rangan reiterated on October 28, 2025, a ‘Buy’ rating and $630 price target on Microsoft.
“We reiterate our Buy rating and PT of $630 following Microsoft’s announcement of its amended agreement with OpenAI, with several key developments:
1) OpenAI has contracted to purchase $250B of incremental Azure services,
2) Microsoft’s loss of right of first refusal (ROFR) to be OpenAI’s compute provider,
3) Extension of Microsoft’s IP rights of OpenAI models and products to 2032, now inclusive of post-AGI models,
4) Completion of OpenAI’s recapitalization, cementing the structure as a nonprofit (OpenAI Foundation) with controlling stake in the for-profit business (OpenAI Group PBC).
Upon OpenAI’s recapitalization, Microsoft now holds $135B investment in OpenAI Group PBC, which represents a stake of ~27% (as-converted diluted basis) in OpenAI Foundation and ~32.5% in the for-profit OpenAI Group PBC (exclusive of recent funding rounds).
We see the amended agreement as a critical step towards making a clear establishment of the ownership of the technology between both companies.
The $250B commitment for Azure services is not only supportive of Azure growth but also validates Microsoft’s position as a leading cloud-provider for AI workloads.
Furthermore, Microsoft’s extended IP rights through 2032, now including post-AGI models, will provide crucial long-term value protection.
While Microsoft loses its ROFR on compute services, we believe the trade-off is minimal given OpenAI’s substantial contractual commitment to Azure, along with Microsoft already demonstrating a willingness to engage only when OpenAI workloads benefit its long-term strategy (re: Google, Oracle, etc.).
All together, the updated agreement substantiates our belief that Mirosoft’s relationship with OpenAI will enable the former to further solidify its leadership in AI innovation across the infrastructure, platform, and application layers of the tech stack.”
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