Analysts raise Microsoft’s price target to $600 on strong AI momentum, Azure growth, and confidence in long-term profitability.
In the past 30 days, Microsoft (MSFT) stock has increased by 5.9%, surpassing $500. Analysts who were previously uncertain about the company’s stock earlier this year are now growing their projections.
In recent months, the developer responsible for Windows has implemented an AI-first strategy, which has reduced employment opportunities to automate tasks using artificial intelligence technology.
Investors have recently revised their price projections for MSFT stock upward, suggesting that they perceive these developments as advantageous.
Ben Reitzes, an analyst at Melius Research, has increased his target price for Microsoft stock from $520 to $595 and reiterated his buy rating. The stock is currently trading at just over $502.
According to the analyst, the software behemoth will reap the rewards as artificial intelligence applications increase the utilization of cloud infrastructure.
Reitzes stated in a client note that the demand for AI-driven solutions will continue to drive increases in infrastructure capacity, with companies such as Microsoft, Amazon, Google, and Oracle investing significantly in AI compute.
Fellow Magnificent Seven companies. Despite the adverse market conditions, Amazon and Alphabet, Google’s parent company, have also experienced gains this year due to their investments in AI.
AMZN has experienced a 6% increase in the past month, while GOOGL has experienced a 4% increase during the same period.
OpenAI Partnership Benefits Microsoft
Additionally, Reitzes addressed Microsoft’s conflicting relationship with OpenAI, the developer of ChatGPT.
“The agreement appears to be advantageous for Microsoft in general, even though there are concerns regarding the potential for increased conflicts of interest between OpenAI and Microsoft in the long term,” Reitzes stated.
“We observe that Redmond owns a substantial portion of what could be a multi-trillion-dollar entity with OpenAI, despite OpenAI’s desire for Microsoft to own less than 49%.”
Microsoft is trading above its 200-day simple moving average and is trading near the top of its 52-week range at publication. Wall Street analysts have assigned the company’s stock a Strong Buy rating, and a consensus price target indicates potential growth.
Microsoft is perceived to be well-positioned for future development in the AI innovation cycle, as its investments in AI are anticipated to generate substantial returns.
The company’s AI capabilities and cloud offerings continue to improve, and it remains a top choice among Mag-7 equities and a key player in the technology industry.