Microsoft: Durable Growth, Underappreciated AI and Cloud Upside Justify Continued Buy Rating

Microsoft, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Keith Weiss from Morgan Stanley maintained a Buy rating on the stock and has a $650.00 price target.

Keith Weiss has given his Buy rating due to a combination of factors that highlight Microsoft’s durable growth profile and attractive valuation. He emphasizes that the company is delivering robust top-line expansion on an already massive revenue base, while simultaneously improving profitability, which translates into strong double‑digit EPS growth. In his view, the current earnings multiple does not fully reflect this earnings momentum or the quality of the company’s fundamentals, especially given the scale and consistency of performance. He also notes that, even after adjusting for the impact of large AI‑related contracts, the underlying demand across Microsoft’s commercial portfolio remains broad and resilient.
At the same time, Weiss acknowledges that investors have become very focused on Azure and M365 Commercial Cloud as key gauges of Microsoft’s generative AI positioning. Although Azure growth modestly fell short of elevated market expectations for a bigger beat, it still outpaced company guidance and is supported by exceptionally strong backlog and remaining performance obligations, suggesting substantial revenue visibility ahead. He believes that the market’s near-term disappointment with the magnitude of the Azure upside overlooks the strength of overall bookings and the company’s ability to further expand margins over time. Taken together, these factors support his view that the long-term opportunity, particularly in AI and cloud, is not fully reflected in the current share price, justifying a continued Buy recommendation.

Weiss covers the Technology sector, focusing on stocks such as Microsoft, Adobe, and Atlassian. According to TipRanks, Weiss has an average return of 11.7% and a 61.94% success rate on recommended stocks.

In another report released today, TipRanks – OpenAI also downgraded the stock to a Buy with a $545.00 price target.