Microsoft, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Derrick Wood from TD Cowen reiterated a Buy rating on the stock and has a $625.00 price target.
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Derrick Wood has given his Buy rating due to a combination of factors tied to Microsoft’s strong competitive position in cloud and AI. He expects Azure to deliver slightly better growth than current estimates, supported by robust demand for both GPU- and CPU-based computing workloads, even though overall growth is temporarily capped by capacity limitations. His survey work shows Microsoft as the top intended destination for new AI budgets and total cloud spending, signaling durable share gains versus major rivals. In addition, third-party data and datacenter leasing activity point to sustained, healthy momentum in Azure demand, with potential for growth to re-accelerate as new capacity comes online in the second half of 2026.
Despite the stock’s recent pullback and the likelihood that shares may trade sideways in the near term until Azure growth visibly accelerates, Wood views the current valuation as attractive relative to Microsoft’s medium-term prospects. He highlights the substantial OpenAI contract as a key contributor to future remaining performance obligations, reinforcing the long-term revenue pipeline even if it does not immediately move the stock. Taken together, these elements underpin his positive view of Microsoft’s ability to capture an outsized portion of AI and cloud spending over the next several years. As a result, he reiterates a Buy rating and sets a price target of $625, reflecting a premium multiple on expected fiscal 2027 earnings.
Wood covers the Technology sector, focusing on stocks such as Microsoft, ServiceNow, and Adobe. According to TipRanks, Wood has an average return of 5.1% and a 47.78% success rate on recommended stocks.
In another report released on January 15, TipRanks – Google also reiterated a Buy rating on the stock with a $526.00 price target.