UBS Raises Microsoft Price Target to $525

UBS analyst Karl Kierstead raised the price target on Microsoft (NASDAQ: MSFT) to $525 (from $480) while maintaining a Buy rating.

“Microsoft reported a surprisingly solid 4Q/Jun print, highlighted by an Azure beat (4Q/1Q actual/guidance of 43%/45% relative to expectations of 41%/42%), a reaffirmation (no raise) of the CY26 capex guidance excluding the impact of an accounting change (in contrast to peers and the investor debate of how high capex estimates might have to move) and impressive margin control.

All-in, each of the major debate points (Azure, capex, M365, margins) turned out in-line or better. We are Buy-rated.

Azure and Copilot Improve the AI Narrative – The good news on the revs front came via the two main AI monetization levers today – Azure and M365/Copilot.

The 4Q/Jun Azure growth of 43% landed two-points above the 41% bogey, as new AI capacity ramped faster-than-expected and due to the GitHub Copilot pricing change, and the Azure guidance of 45% for 1Q/Sept was a full 2+ points above the bogey.

This follows the acceleration trend from hyperscaler peers, although much more muted.”

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