Citi ups Microsoft target, opens ‘upside 90-day catalyst watch’

Citi raised the firm’s price target on Microsoft (MSFT) to $605 from $540 and keeps a Buy rating on the shares. The firm also added an “upside 90-day catalyst watch” on the shares. Citi says Microsoft remains its top pick in software given the company’s “relative defensiveness in a choppy macro environment,” artificial intelligence product cycle and “reinforced conviction” that Street estimates on Azure may be too low for fiscal 2026. The firm believes the share catalyst will be fiscal Q4 earnings when fiscal 2026 guidance is announced and beyond as both Microsoft and OpenAI AI revenue continue to ramp. Citi says Azure has “hit an inflection” based on its exit rate math and token usage.