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Investing.com - DA Davidson has reiterated its Buy rating and $650.00 price target on Microsoft (NASDAQ:MSFT) following the company’s strong first-quarter fiscal 2026 earnings results.
The research firm highlighted that Microsoft beat both top and bottom-line expectations in its quarterly report, demonstrating continued strength across its business segments.
Azure, Microsoft’s cloud computing platform, maintained robust growth at 39% during the quarter, showing resilience in the company’s cloud business despite market competition.
DA Davidson noted that Microsoft plans to significantly expand its computing capacity over the next two years, including the development of the Fairwater site which will bring 2 gigawatts of capacity online by next year.
The firm also mentioned that Microsoft expects to face capacity constraints throughout the remainder of the fiscal year, suggesting strong demand for its cloud services is outpacing current infrastructure capabilities.
In other recent news, Microsoft reported a strong first-quarter performance, with approximately 17% revenue growth in constant currency, surpassing analyst expectations of about 14%. Azure cloud services experienced a 39% growth in constant currency, which was slightly above consensus estimates but remained flat compared to the previous quarter. Despite this growth, some analysts, such as Piper Sandler, noted that Azure’s performance fell short of investor expectations, which were 40% or higher.
TD Cowen responded to these results by raising its price target on Microsoft to $655 while maintaining a Buy rating. Meanwhile, KeyBanc reiterated its Overweight rating, highlighting ongoing capacity constraints in the Azure cloud business that could impact future growth. Oppenheimer also reaffirmed its Outperform rating, acknowledging the strong growth of Azure and other cloud services, even amid slight deceleration. Guggenheim maintained a Buy rating, citing Azure’s traction and the anticipated adoption of Microsoft 365 Commercial Copilot as positive factors.
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