Morgan Stanley analyst Keith Weiss maintained Microsoft Corp. MSFT with overweight and increased the price target from $465 to $520.
Weiss highlighted that as investors focus on the generative AI cycle and seek to identify assets that can monetize and multiply the benefits of these innovations, he extended his Microsoft discrete forecast to 5 years, highlighting the story of sustainable EPS made possible by their strong secular positioning. .
Weiss expects Microsoft’s leadership position across several secular growth trends to result in a revenue CAGR of 14% and EPS CAGR of 16% through fiscal 2029.
Weiss noted that Microsoft’s improved positioning for public cloud is driving a growing share of the overall IT portfolio, as evidenced by Microsoft’s commercial revenue increasing 3.5% share in overall software market estimates of IDC over the past five years.
The analyst noted that more robust positioning for Enterprise PaaS workloads should allow Azure to take the lead in public cloud market share by 2032.
Its current model assumes that revenue from Microsoft’s three largest GenAI initiatives will grow from about $5 billion in fiscal 2024 to nearly $67 billion in fiscal 2029, contributing to ~4% growth point per year during this period.
Weiss’ new price target reflects his confidence in the sustainability of Microsoft’s EPS growth trajectory and its leadership position in AI, ahead of a significant market opportunity.
Citi Analyst Tyler Radke attended Microsoft’s Fabric Community conference in Las Vegas and spoke with partners to better understand the opportunities and challenges for customers adopting Microsoft’s Fabric data architecture.
The analyst came out progressively positive, with further product improvements and encouraging feedback from customers and partners.
The inaugural event was well attended and demonstrated Microsoft’s willingness to invest and build a more comprehensive Azure data platform that could intensify the competitive environment with ISVs. data in a context of increasing modernization of the data park.
Radke’s findings suggest that Microsoft is innovating quickly. He noted that the combination of Fabric, Co-Pilot and other GenAI-related services has strengthened Microsoft’s leading position in the GenAI investment cycle.
Microsoft stock has gained more than 50% over the past 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Technology XLK And Fidelity MSCI Information Technology Index ETF FTEC.
Price action: MSFT shares were up 0.49% at $425.35 at last check Thursday.
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