Stifel Raises Microsoft Price Target to $415
Stifel analyst Brad Reback raised the price target on Microsoft (NASDAQ: MSFT) to $415.00 (from $392.00) while maintaining a Hold rating.
“Microsoft posted a clean-print highlighted by ~100bps Azure upside (inline with buyside expectations), +5M Q/Q Copilot M365 adds (better than expected), and modestly better profitability.
Additionally, management guided Azure to accelerate in 4Q and indicated this should continue into 1HFY27.
Looking forward, the company laid-out early FY27 guidance commentary that included CY26 Capex ($190B), sustained double-digit revenue and operating-income growth on mid-to-high-single-digit OPEX growth (headcount expected to decline again as was down YoY in 3Q).
While management did not talk about gross-margin it clearly will compress in FY27, with the magnitude a function of mix shift, efficiency gains and OAI savings.
We note the stock traded all over the board AHs and finished essentially flat.
Given the Azure acceleration commentary and double-digit op-income growth guide we would have expected more positive follow through.
Maybe this happens over the next few days or investors remain skittish with capex growth >2X commercial-cloud growth.”
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