Investment bank Oppenheimer upgrades Microsoft to "Outperform": AI potential still not fully priced in
Investment bank Oppenheimer upgraded Microsoft's rating to "Outperform," believing that its potential in the field of artificial intelligence has not yet been fully reflected in the stock price. Analysts pointed out that although Microsoft's stock price is nearing historical highs, the growth potential of its AI business and cloud service platform Azure remains underestimated. Oppenheimer set a target price of $600, which represents more than 20% upside from the current stock price. About 90% of analysts recommend buying the stock
According to the Zhitong Finance APP, on Wednesday, investment bank Oppenheimer upgraded its rating for Microsoft Corporation (MSFT.US). There is an increasingly broad consensus on Wall Street regarding the strong position of this software giant in the field of artificial intelligence, and this upgrade further confirms that.
Analyst Brian Schwartz raised Microsoft's rating from "Hold" to "Outperform." He stated that although Microsoft's stock price has performed well this year and is nearing historical highs, the current price of $496.62 does not fully reflect its upside potential in the field of artificial intelligence.
In his report, he wrote, "The continued strong growth potential of Microsoft's AI business has not yet been fully reflected in the stock price, and the expectation of accelerated growth for its cloud service platform Azure in fiscal year 2026 is also not adequately reflected."
He added, "As Azure continues to grow strongly, investor attention on Microsoft's AI revenue growth will only increase. This will not only support valuations but also provide upward momentum for the stock price as this revenue segment expands rapidly and investors recognize Microsoft as one of the long-term AI winners in the software sector."
As of the time of publication, Microsoft was up 1%. As of the previous trading day's close, the stock has risen 40% from its April low, and its 18% increase this year has easily outpaced the Nasdaq 100 index's 8% rise.
Oppenheimer set a target price of $600 for Microsoft, which represents over 20% upside from its latest closing price. Currently, analysts have an average target price for Microsoft slightly below $530, implying about 6% upside potential.
With this rating upgrade, Oppenheimer joins a large camp of bullish analysts on Microsoft. Among analysts tracked by Bloomberg, about 90% recommend buying the stock, with no analysts giving a bearish rating
