Raymond James raises Fulgent Genetics stock price target to $36 on strong performance
Investing.com -- Baird initiated coverage of Microsoft with an Outperform rating and a $600 price target, pointing to the company’s broad cloud and AI footprint and its ability to sustain double-digit growth at scale.
The broker’s analyst William Power says Microsoft is “leading the AI revolution” with infrastructure, applications and its partnership with OpenAI, which together form an end-to-end platform for enterprises and consumers.
While the stock has rallied this year, Power argues the setup remains attractive as AI demand continues to drive cloud momentum.
Microsoft staged a strong start to fiscal 2026 (F26), with total revenue rising 18% in the latest quarter to $77.7 billion, led by Azure and Intelligent Cloud.
Azure grew 40% year over year, and Microsoft’s total cloud business—now roughly 60% of revenue—expanded 25% in constant currency.
Power also points to Copilot adoption, which surpassed 150 million monthly active users, and continued strength across core applications such as Microsoft 365, LinkedIn and Dynamics, which together grew 17%.
The analyst expects Microsoft’s profitability profile to remain a key differentiator. The company posted a 49% operating margin and a 33% free-cash-flow (FCF) margin in the quarter, supporting sustained earnings growth.
While he acknowledges the ramp-up in AI infrastructure spending, forecasting capex rising from $88 billion in fiscal 2025 to $143 billion in 2026, Power still sees “a strong $74 billion of FCF in F26.”
On the valuation front, Microsoft shares trade at about 29 times Baird’s 2026 adjusted EPS estimate, a premium to the market, though below recent highs.
Even so, Power argues that Microsoft’s “strong double-digit growth coupled with impressive margins” should continue to “stack up well relative to the broader market.”
The analyst also notes that while “there’s certainly growing AI speculation in the market,” the timing of any potential bubble is difficult to call, and valuations for Microsoft and its hyperscaler peers “don’t seem particularly heady relative to the growth outlook.”