Microsoft stock rating reiterated at Outperform by Evercore ISI

Investing.com - Evercore ISI has reiterated an Outperform rating on Microsoft (NASDAQ:MSFT) with a price target of $640.00, representing significant upside from the current price of $487.12. This aligns with the broader analyst sentiment, as InvestingPro data shows 26 analysts have recently revised their earnings expectations upward for the upcoming period.

The firm expressed bullish sentiment following Microsoft’s Ignite User Conference and meetings with Microsoft President of Business & Industry Copilot Charles Lamanna, as well as executives from AvePoint.

Evercore ISI highlighted Microsoft’s expanding scope across agents, business applications, the Power Platform, and Agent 365 offering, noting that Agent 365 will serve as the "core registry of registries," giving Microsoft a structural advantage as organizations manage agent proliferation. As a prominent player in the software industry with a market capitalization of $3.62 trillion, Microsoft continues to leverage its scale to advance AI integration.

The firm noted that while customers remain in early stages of data readiness, agents are already delivering positive outcomes in software development, customer success, and sales and marketing, with business applications being "fundamentally reshaped" by agents, WorkIQ, and Copilot. This innovation is helping drive Microsoft’s impressive 15.59% revenue growth over the last twelve months.

Evercore ISI believes the recent pullback in Microsoft’s stock "sets up an attractive buying opportunity heading into CY26," citing the company’s strong positioning in artificial intelligence. With a P/E ratio of 34.64 and trading near its InvestingPro Fair Value, investors seeking deeper insights can access Microsoft’s comprehensive Pro Research Report, available among 1,400+ top stocks analyzed with expert precision.

In other recent news, Microsoft has been in the spotlight with several key developments. Following the company’s Ignite conference in San Francisco, TD Cowen reiterated its Buy rating on Microsoft, emphasizing the company’s leadership in AI and setting a price target of $655. Similarly, KeyBanc maintained its Overweight rating with a $630 price target, highlighting Microsoft’s significant investment of up to $5 billion in Anthropic, alongside Anthropic’s $30 billion commitment to Azure spending. Guggenheim also reaffirmed its Buy rating with a $675 price target, noting the unveiling of new products and partnerships aimed at helping enterprises become "AI frontier firms."

Additionally, a report from Bank of America revealed that Microsoft, along with other major technology hyperscalers, has issued a record $121 billion in investment-grade debt this year, surpassing the five-year average. This includes $81 billion in U.S. dollar investment-grade supply from companies like Amazon, Alphabet, Meta, and Oracle since September. Meanwhile, OpenAI has launched a free ChatGPT for Teachers, available to verified U.S. K-12 teachers through June 2027, aiming to enhance the educational experience by saving educators time. These developments mark significant strides in AI and financial strategies for Microsoft and other tech giants.

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