Wolfe Research Raises Microsoft Price Target to $550
Wolfe Research analyst Alex Zukin raised the price target on Microsoft (NASDAQ: MSFT) to $550 (from $525) while maintaining an Outperform rating.
“MSFT took the gloves off this quarter, with an Azure uppercut, and M365 jab and a CapEx bob and weave that was enough to change the course of the fight.
They also made sure to remind us that the 8% sequential RPO growth was all regular way (not frontier lab driven) business while shifting the event horizon from model to harness and pricing model from seat to consumption.
The tone was set early as Azure delivered the biggest beat since 4Q25, accelerating 4pp Q/Q to 43%, guideing 1Q to 45% (+350bps) vs cons (largest since 4Q25), supported by another 1GW of capacity (3GW+ TTM).
Outperformance came from better efficiency across CPU / GPU fleets, faster deployment of new capacity, and incremental consumption monetization from GitHub, trends that to us seem durable and structural.
We see a positive Azure setup into FY27 (and raise our numbers to 45.5% for the year) as capacity additions become more consistent, deployment cycles shorten, and demand remains WELL ahead of supply.
The Apps engine also got a tune-up, with accelerating M365 growth, Copilot seat adds doubling and reaching 30M, and usage based credit consumption up >4X Q/Q as consumption layers on top of seats.”
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