Bernstein Raises Microsoft Price Target to $647

Bernstein SocGen Group analyst Mark Moerdler raised the price target on Microsoft (NASDAQ: MSFT) to $647 (from $646) while maintaining an Outperform rating.

“Microsoft (MSFT, $647 TP, Outperform) delivered what we believe are the three main data points that investors have needed to see to become more constructive on the company: 1) Azure revenue to accelerate meaningfully (43% in Q4 and 45% guide for Q1) ; 2) CAPEX growth to be stable as Azure accelerates; and 3) strong Copilot adoption.

Even with the move we expect when the market opens we continue to believe the stock is undervalued when one considers 1) MSFT’s ability to deliver stable GAAP margins in the mid 40s and 2) downside risk protection.

Even if we see some bubble like behavior in parts of AI, this is a stock that every investor should have significantly in their portfolio.

We raised our price target from $646 to $647 as we roll forward our estimates and lower our valuation multiple from 29x to 26.5x, to reflect peer step-down in peer group valuation.”

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