Microsoft price target raised to $530 from $482 at Morgan Stanley

Morgan Stanley raised the firm’s price target on Microsoft (MSFT) to $530 from $482 and keeps an Overweight rating on the shares after the firm updated its capex-implied AI revenue analysis and its OpenAI model detailing the contribution to Azure. While investors continue to debate the “Return on Investment” of rising capital expenditures, the firm sees the yields on Microsoft’s investments in Generative AI “becoming increasingly apparent,” says the analyst, who expresses increased confidence in upside to Azure forecasts. Microsoft’s “prime position for the upcoming GenAI innovation cycle matched with solid execution is driving an acceleration in the Azure business,” the analyst argues.