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On Thursday, Evercore ISI increased its price target on Microsoft Corporation (NASDAQ:MSFT) shares from $500 to $515, while keeping an Outperform rating. The adjustment follows the Evercore ISI annual Microsoft 360™ event, which featured virtual panels with Microsoft customers and partners, as well as face-to-face meetings with Microsoft’s President of the Americas, Deb Cupp, and the Investor Relations team. With a current market capitalization of $3.36 trillion and trading near its 52-week high, Microsoft continues to demonstrate strong momentum. According to InvestingPro data, 25 analysts have recently revised their earnings upward for the upcoming period, with price targets ranging from $430 to $650.
The firm’s analyst highlighted Microsoft’s strong positioning to capitalize on the early stages of enterprise AI adoption. With Azure’s infrastructure and application capabilities, Microsoft is set to leverage the growing AI demand. Evercore ISI notes that Microsoft’s commitment to AI investment is balanced with efforts toward operational efficiency. The company’s robust financial health is evident in its impressive 69% gross profit margin and 14.13% revenue growth over the last twelve months, as reported by InvestingPro.
Despite the uncertain macroeconomic backdrop, customer intentions to invest in AI technologies have not waned, indicating AI’s high priority in organizational strategies. Partners have identified Microsoft’s AI offerings as a differentiating factor compared to other hyper-scalers, with a broad product portfolio that taps into new spending areas beyond traditional IT budgets.
According to feedback from partners, key products driving Microsoft’s AI adoption include GitHub Copilot and Copilot for Teams. The decision to offer Copilot Chat at no charge is seen as a catalyst for faster adoption. Additionally, Microsoft’s identity management and security capabilities are recognized as underappreciated yet compelling differentiators.
Customer panelists at the event expressed a belief in Microsoft gaining a larger share of their IT spend and being integral to their long-term AI strategies. Evercore ISI’s positive outlook is supported by these insights, suggesting a robust long-term potential for Microsoft in the enterprise AI market.
The firm also made slight adjustments to its fiscal year 2026 Azure estimates, primarily due to a slower deceleration in non-AI consumption. The recent upward movement in Microsoft’s share price reflects increased confidence in Azure demand trends. However, Evercore ISI emphasizes that Microsoft’s AI opportunity is still in its early stages, with the potential to grow into a $110 billion business by calendar year 2028. The firm’s reiterated Outperform rating and raised price target are based on a 32.5 times multiple of projected calendar year 2026 earnings per share. Currently trading at a P/E ratio of 34.8x, Microsoft’s valuation reflects its premium position in the market. InvestingPro analysis indicates the stock is trading above its calculated Fair Value, with additional insights available in the comprehensive Pro Research Report, which offers deep-dive analysis of Microsoft’s financial health, valuation, and growth prospects.
In other recent news, Microsoft Corporation has taken significant legal action against the Lumma Stealer malware through its Digital Crimes Unit, targeting nearly 400,000 infected Windows computers globally. This effort was bolstered by a court order from the U.S. District Court of the Northern District of Georgia and intervention from the U.S. Department of Justice, which disrupted the malware’s central command and sales. Meanwhile, Citi has maintained a Buy rating on Microsoft stock with a price target of $540, highlighting the company’s advancements in artificial intelligence presented at the recent Build conference. The conference underscored Microsoft’s commitment to an "open agentic web" and its leadership in the enterprise general AI space.
Additionally, Raymond (NSE:RYMD) James has reaffirmed an Outperform rating for Microsoft, with a price target of $490, emphasizing the company’s strategic advancements in AI technology. This aligns with Microsoft’s broader strategy to integrate AI across its services, enhancing capabilities and addressing previous limitations. In related developments, OpenAI’s data center supplier, Crusoe, has secured $11.6 billion in funding to expand its Texas data center, reducing OpenAI’s reliance on Microsoft for computing power. Lastly, Citi has initiated a 90-day Upside Catalyst Watch on Confluent, Inc., reflecting optimism for the company’s prospects amid a stable software sector environment.
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