RBC Capital analyst Rishi Jaluria reiterated an Outperform rating and $640.00 price target on Microsoft (NASDAQ: MSFT).

The analyst comments "Stepping back , we are a little surprised to see another amended agreement, six months after the prior one (see here ), but acknowledge the dynamics in AI are shifting very quickly. We are also unclear on a few components of the deal, including research rights and API exclusivity, and will look for more color on Wednesday's earnings call. Ultimately, we believe the updated agreement could be positive for both Microsoft, as the company becomes less dependent on OpenAI and leverages a multi-model approach, and for OpenAI, opening its ability to expand capacity with other providers and providing greater incentive for those partners to work with OpenAI."

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Shares of Microsoft closed at $424.62 yesterday.