Evercore ISI Raises Microsoft Price Target to $528

Evercore ISI analyst Kirk Materne raised the price target on Microsoft (NASDAQ: MSFT) to $528 while maintaining an Outperform rating.

“Bottom line: Christmas came a bit early for MSFT shareholders.

While we expected Azure acceleration to help shift the narrative in 2H CY26, the magnitude of the upside (43% in F4Q and ~45% implied in F1Q) came in ahead of even the most bullish expectations.

At the same time, while our cash capex outlook (~$200bn) remains largely unchanged, management’s call for positive FCF in FY27 removes a key overhang around a more draconian capex scenario.

Finally, Copilot continues to build momentum (30mn paid seats, +10mn q/q), which is beginning to translate into broader M365 acceleration and a clearer monetization path.

Combined with market trends around multi-model enterprise architectures and Microsoft’s positioning across security and the application stack, we continue to see an attractive setup into 2H CY26 as estimates likely move higher and the enterprise AI buildout remains in the early innings.

We are nudging our price target to $528 or ~25x CY27 EPS.

Quarterly results: Microsoft reported total revenue of $90.0bn (+18% y/y), operating income growth of 18%, and EPS of $4.74, all ahead of expectations.

Azure and other cloud services accelerated to 43% growth, while Microsoft Cloud revenue increased 27% to $59.3bn.

Commercial RPO grew 84% y/y to $678bn (25% excluding OpenAI), highlighting continued strength in enterprise demand beyond frontier model companies.

Management also guided Azure to approximately 45% growth in F1Q while reiterating that demand continues to exceed available capacity.”

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