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Takeaways
- Microsoft shares rallied Thursday after the company's quarterly results beat Wall Street’s expectations.
- Several analysts raised their price targets for the stock and Morgan Stanley called it one of the company's strongest quarters in recent memory.
- Microsoft has reiterated its plans to spend $80 billion in infrastructure in fiscal 2025.
Microsoft (MSFT), a company whose shares rose Thursday, posted what Morgan Stanley described as “one of its strongest quarters since recent memory,” fueled by growth in cloud computing and AI.
Microsoft shares have risen nearly 9% to $430 in recent trading, putting them on track for a positive 2025.
Morgan Stanley has raised its price target for the stock to $482, up from $472. The results have exceeded Wall Street’s expectations in all segments. The analysts said, “We remain strong purchasers of this GenAI-winner.” Microsoft appears to be positioned to benefit from GenAI investments, despite the macro-economic uncertainty. This should support share gains and a more durable growth in the future.
Bank of America maintained a $515 target, and noted earlier-than-expected returns on Microsoft’s infrastructure investments. During Microsoft’s earnings call on Wednesday, Amy Hood, CFO, reiterated the plan to spend 80 billion dollars on infrastructure by fiscal 2025. Hood said that the demand for AI continues to grow. Microsoft expects to “have some AI capacity limitations beyond June.”
Jefferies increased its target from $475 to a more bullish amount of $550, while Wedbush shifted to $515. Wedbush said, “We are laser-focused on the AI piece of the MSFT story.” “All metrics were above expectations, which gives us added confidence in our AI Revolution bull hypothesis.”
