Stifel Reiterates Hold on Microsoft, $415 Price Target

Stifel analyst Brad Reback reiterated a Hold rating and $415.00 price target on Microsoft (NASDAQ: MSFT).

“While all hyperscaler capex has grown at unprecedented levels in absolute dollars over the last few years, unlike the early days of the CPU-Cloud build-out, all Cloud-vendors, and especially MSFT, are aggressively using Finance leases given the size, scale and rapid growth in demand for AI-Cloud based workloads.

We note that MSFT’s “leases not yet commenced” balance (an overlooked disclosure of committed lease that will impact future financial statements) stands at $196.6B at 3/31/26, up >2X in the last nine months.

Given this dramatic growth, we have assembled a lease accounting deep-dive to assess the longer-term financial impacts from these investments.

Importantly, finance leases help to improve reported operating income and traditional FCF given where costs land on the IS and CFS.

Net/net, as these ~$200B of Finance leases commence in the next five years they will have a nontrivial impact on interest-expense, potentially representing a headwind to EPS upside.”

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