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Investing.com -- Oppenheimer raised its rating for Microsoft (NASDAQ:MSFT) to Outperform from Perform on Wednesday, setting a new price target of $600 per share on the stock.
The firm highlighted its growing confidence in the company’s artificial intelligence strategy and sustained cloud momentum.
“We upgrade MSFT to Outperform from Perform and establish a $600 PT,” analysts wrote, highlighting that “investors’ attention on the ramp of Microsoft’s AI revenue stream will only increase as Azure’s growth remains strong.”
According to Oppenheimer, the AI business now offers valuation support similar to the role Amazon (NASDAQ:AMZN) Web Services plays for Amazon.
The firm believes the market is still underestimating Microsoft’s AI potential. “Sustaining robust growth in its AI business is not fully in the stock,” the analysts said, pointing to the opportunity for Microsoft to reaccelerate Azure growth in fiscal year 2026.
Crucially, Microsoft is seen as one of the rare software companies capable of delivering what analysts described as a “Rule of 60 business profile,” a reference to companies that achieve strong revenue growth and profitability in tandem.
“Microsoft is one of only a few vendors in the software industry capable of delivering a Rule of 60 business profile and at unprecedented scale, which we think lends good support to premium multiples,” the note said.
With Azure continuing to scale and AI adoption accelerating across industries, Oppenheimer expects Microsoft to be “one of the long-term AI winners in software,” supporting their bullish thesis and the stock’s potential re-rating higher.