Barclays Raises Microsoft Price Target to $610

Barclays analyst Raimo Lenschow raised the price target on Microsoft (NASDAQ: MSFT) to $610 (from $600) while maintaining an Overweight rating.

“Sentiment was positive going into Q1 FY27 earnings and MSFT did not disappoint.

We think there can be an ongoing follow-through though as we see shares still under-owned in the Long-Only community (partly due to the underweight-software theme).

Azure, at much larger scale, is approaching 50% YoY growth, and we can see how some of the capacity push-outs into H2 indicate that this might not be the end of the story.

However, more important to us is that the other large franchise for MSFT, Office, is also accelerating (19% YoY in constant currency, fully adjusted), a trend management thinks will continue in the coming quarters.

Office success is especially important as it comes with better gross margin and is also a business that enables greater differentiation.

This MSFT success does not come to the detriment of the capital position as MSFT again mentioned positive FCF for the year.

In other words, MSFT is offering the best of both worlds: better growth from AI but without the high debt burden risk. We maintain our Overweight rating.”

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