Barclays Reiterates Overweight on Microsoft, $600 Price Target
Barclays analyst Raimo Lenschow reiterated an Overweight rating and $600.00 price target on Microsoft (NASDAQ: MSFT).
“Microsoft reported healthy Q3 FY26 results. All revenue segments were slightly better, and gross margin and operating profit beat by more than the revenue outperformance, which also deserves credit.
However, we can see the bigger debate post this quarter in the stable growth for Azure (39% y/y in cc in Q3, 38% in Q2, 39% in Q1) in comparison to the significant acceleration we are seeing at the other two hyperscalers (AWS 28% (was 24% last quarter) and GCP 63% (was 48%)).
This, combined with the below consensus capex ($31.9bn, consensus $38bn), does not create a favorable picture for AI momentum at MSFT vs. its peers.
This could easily be timing, but the call comments and guidance (including initial FY27 capex comments) will be key to judge the ultimate share price reaction.
There is some hope as Commercial Office grew 15% y/y (vs.
13-14% guidance) as this could suggest that Copilot is getting large enough to impact results here, but we could be too early in this thinking.”
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