Oppenheimer Reiterates Outperform on Microsoft, $625 Price Target

Oppenheimer analyst Brian Schwartz reiterated an Outperform rating and $625 price target on Microsoft (NASDAQ: MSFT).

“Reiterating our Outperform rating on Microsoft after strong F1Q27 (Sept.) results that cleared rising investor expectations.

Specifically, Azure growth accelerated again, exceeding buyside expectations, and management guided to roughly 50% growth in the December quarter.

These items suggest that added capacity from improving efficiency is converting to revenue.

However, some added capacity is pushing out to 2HFY27, which could mean less capacity-related upside in future quarters.

In addition, M365 commercial cloud growth accelerated despite seat growth slowing on higher ARPU from Copilot, premium-suite upsell, and GitHub Copilot consumption.

This supports our view that Copilot monetization is expanding beyond seats and helps dispel AI disruption concerns. Further, operating margin hit a 25+-year-high in F1Q27.

Negatively, FCF declined as cash capital spending roughly doubled, and gross margin compression persists”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.