Evercore: With the support of Azure and AI strategy, Microsoft remains a "favorite" for long-term investors
Evercore ISI pointed out that Microsoft remains a popular choice for long-term investors due to its artificial intelligence strategy and the continued growth of Azure cloud services. Analyst Kirk Materne stated that Microsoft's current stock price corresponds to a 29 times price-to-earnings ratio for fiscal year 2026, offering an attractive risk-reward ratio. Evercore rated the stock as "outperform," setting a target price of $500. It is expected that annual revenue from Azure's AI-related services has surpassed $14 billion, and Azure will maintain a robust revenue growth rate of over 30% in the coming quarters
According to the Zhitong Finance APP, Evercore ISI pointed out that Microsoft (MSFT.US), as a software giant, remains an attractive target for long-term investors. Its artificial intelligence strategy is gradually showing results, and the Azure cloud services division has demonstrated impressive growth momentum for several consecutive quarters.
Evercore analyst Kirk Materne stated in an investor report released on Thursday: "The key is that Microsoft's current stock price corresponds to a 29 times price-to-earnings ratio based on Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) for the fiscal year 2026 (CY26). We have always believed that its stock offers an attractive risk-reward ratio for long-term investors."
After falling to a 17-month low in early April, Microsoft's stock price has rebounded significantly over the past month and is now approaching the historical high set last summer. Evercore rates the stock as "Outperform," with a target price set at $500.
Materne noted: "We estimate that annual revenue from AI-related services on the Azure platform has surpassed $14 billion, and annual revenue from Microsoft 365 Copilot (intelligent assistant) is also nearing $2.5 billion. More importantly, the application of enterprise-level artificial intelligence is still in its very early stages. Looking ahead to the fiscal years 2026/2027, the AI business will continue to be an important catalyst for Microsoft's performance."
He added: "As AI computing power continues to come online and non-AI business gradually stabilizes, we believe that even assuming the growth of non-AI business in Azure normalizes, Azure will still maintain a robust revenue growth rate of over 30% in the coming quarters."
Evercore will hold its annual "Microsoft 360 Day" event next Tuesday
