Oppenheimer Maintains Outperform on Microsoft, $515 Price Target
Oppenheimer analyst Brian Schwartz reiterated an Outperform rating and $515 price target on Microsoft (NASDAQ: MSFT).
“We reiterate our Outperform rating on MSFT after solid F4Q26 results and guidance.
Positively, the Azure business is strengthening with 43% growth in F4Q26 and +45% F1Q27 guidance reflecting the fastest growth in four years.
The M365 Cloud business shows stable results in F4Q26 with faster growth targeted throughout FY27.
Additionally, F4Q26 paid Copilot adds display triple-digit sequential growth. In our view, these data points push back on the AI disruption narrative.
On balance, Capex efficiency ratios and gross margin continue deteriorating from ongoing heavy investments in data center build outs to support increasing demand, embedding lower margin AI in the products, and higher Azure mix.
However, an accounting change extending fixed asset depreciation by ten years and recognizing it as an operating expense will lessen near-term Capex.”
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