Piper Sandler on Microsoft (MSFT): 'Buy on Weakness'

Piper Sandler analyst Hannah Rudoff reiterated an Overweight rating and $650.00 price target on Microsoft (NASDAQ: MSFT).

The analyst commented: "39% Azure Growth Reflects Capacity Constraints; Buy on Weakness; Azure growth of 39% cc during Q1 (vs. 37% cc guide and flat with last quarter) that fell short of bullish investor expectations of 40%+, coupled with an outlook of 37% cc Azure growth for Q2, drove a ~3% AMC sell-off in shares. That said, we remain bullish on MSFT and would be buyers on any weakness given: 1) demand continues to exceed supply and we view the Azure growth rate as largely handicapped by capacity (not slowing demand), 2) total capex is now expected to accelerate y/y in FY26 with a pivot towards short-lived assets (GPUs/ CPUs) to support immediate capacity constraints; and 3) commercial RPO and commercial bookings both saw an acceleration in growth to 51% y/y and 111% y/y, respectively. We are maintaining our $650 PT and continue to believe MSFT remains one of the best positioned platforms to capitalize on incremental AI workloads. Reiterate Overweight."

For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.

Shares of Microsoft closed at $541.55 yesterday.

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