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Investing.com - DA Davidson has reiterated its Buy rating and $650.00 price target on Microsoft (NASDAQ:MSFT) stock, despite concerns about the viability of OpenAI. This target represents a 36% upside from Microsoft’s current price of $477.73, which is trading very close to its InvestingPro Fair Value, with analysts maintaining a strong buy consensus.
The firm conducted analysis from multiple sources to estimate Microsoft’s revenue concentration from OpenAI, acknowledging that OpenAI’s contribution to Microsoft’s business is significant.
DA Davidson believes Microsoft will maintain priority status for OpenAI’s spending, which should help Microsoft remain the fastest-growing hyperscaler across various scenarios. This aligns with Microsoft’s impressive 15.59% revenue growth over the last twelve months, reaching $293.81 billion.
The firm maintains its position that Microsoft is the biggest winner in the artificial intelligence sector expansion, particularly as bullishness toward Google parent Alphabet has "overshot."
Microsoft continues to be DA Davidson’s favorite mega-cap stock pick, with the firm’s confidence in the company’s AI positioning remaining strong despite the concerns surrounding OpenAI. With a market capitalization of $3.55 trillion and a solid financial health score rated as "GOOD" by InvestingPro, Microsoft offers stability alongside growth potential. The company has also maintained dividend payments for 23 consecutive years, demonstrating long-term financial strength.
In other recent news, OpenAI has announced a definitive agreement to acquire Neptune, a startup known for its tools that analyze AI model training progress. The acquisition will be completed through a stock transaction, although the financial details have not been disclosed. Additionally, OpenAI is taking a stake in Thrive Holdings to promote enterprise AI adoption, initially focusing on accounting and IT services. This partnership aims to enhance speed, accuracy, and cost efficiency by embedding OpenAI’s research, product, and engineering teams within Thrive Holdings’ companies.
Meanwhile, Microsoft has declared a quarterly dividend of $0.91 per share, payable on March 12, 2026, to shareholders of record as of February 19, 2026. In another development, Marvell Technology has expanded its collaboration with Microsoft to enhance cloud security services in Europe. Marvell’s LiquidSecurity hardware security modules will now power Microsoft’s cloud-based security offerings for European customers, building on existing services in Asia and North America. These developments reflect ongoing strategic moves and partnerships in the tech industry.
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