DoD tests AI models that make it easy to switch from vendors like Palantir
Investing.com - UBS raised its price target on Microsoft (NASDAQ:MSFT) to $600.00 from $500.00 on Wednesday, maintaining a Buy rating ahead of the company’s fourth-quarter earnings report in 7 days. The tech giant, currently trading near its 52-week high of $514.64, has delivered an impressive 20.34% return year-to-date. According to InvestingPro analysis, Microsoft appears to be trading above its Fair Value.
The firm cited potential for Azure cloud service growth to exceed the high end of Microsoft’s guidance range of 35%, along with positive impacts from recent headcount reductions on the fiscal year 2026 margin outlook. With a market capitalization of $3.73 trillion and robust revenue growth of 14.13%, Microsoft maintains a GREAT financial health score on InvestingPro, which offers 15+ additional exclusive insights about the company.
UBS believes investor expectations center around constant currency Azure growth of 36% for the June quarter, with guidance for a modest deceleration to 34% growth in the September quarter.
The firm noted this growth target appears achievable despite requiring historically high sequential revenue increases, based on improved sentiment from enterprise customers and partners compared to the February-April period.
UBS is hosting an investor call on Wednesday, July 23 at 8:30 AM ET to discuss these topics, maintaining that the outlook on Azure growth and earnings per share revisions—the two biggest factors driving Microsoft shares—appears positive.
In other recent news, Citi has raised its price target for Microsoft to $613, citing strong growth in Azure and expectations of robust quarterly results. The firm maintains a Buy rating, highlighting positive revisions and potential upside for Microsoft’s fiscal fourth quarter. Additionally, Microsoft has identified Chinese hackers exploiting vulnerabilities in SharePoint servers, prompting the company to release security updates to address these issues. Lawmakers have also raised concerns with major tech companies, including Microsoft, about security safeguards related to submarine communications cables potentially serviced by Chinese and Russian entities. In another development, Penda Health, in collaboration with OpenAI, has reported promising results for their AI clinical copilot, showing a reduction in diagnostic and treatment errors. Meanwhile, OpenAI has partnered with the UK government to promote AI adoption, supporting the UK’s AI Opportunities Action (WA:ACT) Plan. This strategic partnership aims to unlock economic and societal benefits through AI in public and private sectors.
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