Jefferies Reaffirms Microsoft’s $675 Price Target

Jefferies analyst Brent Thill reiterated on January 4, 2026, a ‘Buy’ rating and $675 price target on Microsoft.

“We see MSFT as the best-positioned large-cap to capture the broadest AI tailwinds, supported by robust backlog growth (51% in F1Q) that underpins accelerating momentum across both M365 Commercial and Azure.

These drivers should translate into meaningful upside to numbers and serve as a catalyst for multiple rerating in CY26, with MSFT currently trading at (27x NTM PE) a three-turn discount to its (30x) five-year historical average.

Importantly, Azure is set for another strong year as incremental capacity alleviates constraints on core and AI workloads, unlocking faster growth and reinforcing its role as a key engine alongside M365.

We expect M365 to further accelerate enterprise adoption of Copilot as organizations move rapidly from pilots to mass rollouts, creating a durable growth cycle across the stack.

Additionally, OpenAI’s continued strength in 2026 should further benefit MSFT, given its roles as a cloud service provider, investor (27% owner), revenue-sharing partner, and holder of IP rights.

We see potential for MSFT to deliver over $22 in FY28 EPS which at a 30x multiple = a >$660 stock.”

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