Analyst explains why you should buy Microsoft stock at current levels

Investing.com -- Jefferies says Microsoft’s (NASDAQ: MSFT)recent pullback has created a compelling entry point, arguing that the company’s backlog, AI partnerships and cloud momentum give it one of the strongest multiyear growth runways in large-cap tech.

Analyst Brent Thill notes the stock is “down 18% since F1Q,” even after Microsoft disclosed “$250B OAI & $30B Anthropic commitments,” and says its valuation, “23x CY27 EPS”, now sits below Amazon and Google “despite superior visibility.”

Jefferies highlights Microsoft’s record commitments as the central reason to buy the stock now.

The firm expects second-quarter remaining performance obligations to deliver “the largest sequential step-up ever,” driven by those OpenAI and Anthropic agreements, which it says reinforce “unprecedented multi-year demand visibility.”

Azure remains a key upside driver. Jefferies says Azure demand is “supply-constrained, not demand-constrained,” with Microsoft set to double its data-center footprint in the next two years.

The company has beaten its Azure revenue guidance for three straight quarters, and Jefferies argues that execution on new capacity alone “could likely drive upside to both F2Q… and FY26 Azure cons.”

The analysts also point to accelerating AI monetization through Copilot and first-party products. With Azure representing “30% of overall revenue,” consistent outperformance could push revenue growth into the “high teens.”

Although Jefferies flags ongoing capacity constraints and heavy capital spending, it maintains a Buy rating and a $675 price target, concluding that Microsoft is well positioned to deliver “meaningful upside to both top and bottom line” through fiscal 2026.

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