Analyst Derrick Wood of TD Cowen reiterated a Buy rating on Microsoft, boosting the price target to $580.00.
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Derrick Wood has given his Buy rating due to a combination of factors that highlight Microsoft’s strong position in the market, particularly in the AI sector. Wood notes that Microsoft is well-positioned to benefit from the ongoing AI cycle, with Azure showing strong growth potential. The easing of capacity constraints and a robust demand for AI services are expected to drive revenue growth significantly.
Additionally, Microsoft’s Office segment is anticipated to experience modest growth, supported by increasing adoption of Copilot and price adjustments. Despite recent share price increases, valuations remain attractive, and Wood believes there is room for further growth driven by Azure’s re-acceleration and investor interest in infrastructure software. The company’s strategic headcount management and favorable foreign exchange conditions also contribute to a positive outlook, reinforcing the Buy recommendation.
In another report released yesterday, Mizuho Securities also upgraded the stock to a Buy with a $540.00 price target.