Piper Sandler Raises Microsoft Price Target to $610
Piper Sandler analyst Billy Fitzsimmons raised the price target on Microsoft (NASDAQ: MSFT) to $610 (from $550) while maintaining a Overweight rating.
“Given MSFT’s the “Super App” announcement, the gradual rollout/uplift from the new E7 tier, and the growing contribution of consumption-based pricing to Copilot/ Cowork, we are introducing a framework to: 1) size the E3, E5, and E7 seats and 2) forecast the ARPU uplift motion and scaling Copilot/Cowork consumption rev on the M365 Commercial Cloud business.
Our conclusions are: 1) every 10% shift of seats from E5 to E7 drives a ~$2B annualized rev uplift (though immediate impact minimal), 2) we see a path to new Copilot/Cowork consumption rev scaling to a $2B annualized run rate by FY28 YE (the rev scale of today’s seat-based Copilot in half the time), and 3) Copilot/Cowork’s value prop is that MSFT’s harness/auto-routing capabilities can perform tasks cheaper than frontier models alone.
Given our increased confidence in the M365 outlook, we are raising our PT to $610 factoring higher estimates and EV/OCF multiple.”
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