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Investing.com - Piper Sandler raised its price target on Microsoft (NASDAQ:MSFT) to $600 from $475 on Thursday, while maintaining an Overweight rating on the stock. The new target represents significant upside potential from Microsoft’s current trading price of $498.59, with the tech giant commanding a market capitalization of $3.7 trillion. According to InvestingPro data, the stock is trading near its 52-week high of $506.78.
The research firm cited Microsoft’s increasing momentum in Infrastructure as a Service (IaaS) market share gains as the primary reason for the significant price target increase.
Piper Sandler noted that Azure spending intentions surpassed 80% for the first time in its surveys, confirming Microsoft’s position as the top cloud and AI infrastructure platform of choice among chief information officers.
The firm highlighted that net spend intentions for Azure have increased for four consecutive surveys, rising to 81% from previous readings of 77%, 66%, and 60%, showing consistent growth in enterprise commitment to Microsoft’s cloud platform.
Piper Sandler’s new price target is based on 26 times calendar year 2030 estimated enterprise value to operating cash flow, discounted back three years by 14%, with analysts also raising their operating cash flow margin expectations to 51.8% from 47.0% previously.
In other recent news, Microsoft announced it will release its fiscal year 2025 fourth-quarter financial results on July 30, 2025, with a live webcast scheduled for the same day. The company has been recognized for its strong position in the AI market, with Morgan Stanley (NYSE:MS) reiterating an Overweight rating, highlighting Microsoft’s leadership in AI and its potential for durable growth. Meanwhile, Oppenheimer upgraded Microsoft to Outperform, citing the company’s growing AI revenue stream and strong momentum in Azure, which could provide valuation support and upside potential.
Additionally, Microsoft reportedly saved over $500 million in its call centers last year by leveraging AI, which has also improved productivity across various segments. The company is facing a challenge in its partnership with OpenAI, as OpenAI plans to release an open-weight language AI model, potentially impacting their exclusive collaboration. This new model will be available through multiple cloud providers, marking a shift from OpenAI’s previous strategy. These developments reflect Microsoft’s ongoing efforts and challenges in the rapidly evolving AI landscape.
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