UBS Lowers Microsoft Price Target to $480

UBS analyst Karl Kierstead lowered the price target on Microsoft (NASDAQ: MSFT) to $480 (from $510) while maintaining a Buy rating.

“As we approach Microsoft’s 4Q/Jun print this week, we offer our fresh thoughts on Azure and M365/Office growth based on a dozen or so recent conversations with Microsoft customers and partners, in addition to updating our view on FY27 capex, margins and the impact of AI model-layer trends such as token optimization and open models on Microsoft.

Bottom line, we remain BUY-rated but are more tactically balanced into this print.

We’re eyes-wide-open to the reality that the Street is not rewarding the stocks of AI infra providers that signal higher capex spend and/or don’t post upside to cloud revs growth and margins (see Oracle and Google).

While Azure/AWS demand appears to be very healthy and the GitHub Copilot pricing change offers a modest Azure growth rate boost, capacity constraints on external customers and early token optimization efforts could limit the potential for material Azure guidance upside, while capex estimates could move higher on MT demand and memory inflation.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.