Microsoft (MSFT) PT Raised to $605 at Citi

Citi analyst Tyler Radke raised the price target on Microsoft (NASDAQ: MSFT) to $605.00 (from $540.00) while maintaining a Buy rating.

The analyst comments "MSFT remains our top pick in software given its relative defensiveness in a choppy macro environment, AI product cycle and our reinforced conviction that Street estimates on Azure may be too low for FY26. In this note we look at growth scenarios for Azure through a few different lenses: a) breaking down Azure growth into monthly exit rates; b) examining AI growth given inflecting token usage commentary; c) a detailed capex ROI analysis which supports a base case of high-30s% Azure growth and an upside case in the 40s%. We raise base case estimates on the back of greater confidence from this scenario analysis and now see 36.1% y/y cc FY26 Azure growth (vs. consensus at 32.1% y/y). We lift our TP to $605 (implying ~32x FY27 EPS), while opening an upside catalyst watch ahead of Jun-Q earnings."

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