JPMorgan analyst Samik Chatterjee raised his Microsoft price target to $625 from $550, implying about 30% upside from current levels. The call follows Microsoft's fiscal fourth-quarter results, which showed $90 billion in revenue and 43% growth in Azure and cloud services.
JPMorgan raises its target to $625
JPMorgan analyst Samik Chatterjee lifted his Microsoft price target to $625 from $550 in a note published Thursday. The revised target assumes about 30% upside from current trading levels. Chatterjee pointed to an expected acceleration in Azure and M365 Commercial Cloud growth, driven by AI infrastructure buildout.
According to Chatterjee: "We have a favorable view on the growth outlook for the company." He added that Microsoft's combination of high revenue and earnings growth, alongside lower capital needs than peers, should justify a return to its historical premium relative to the broader market.
Earnings quiet the bears
Microsoft's fiscal fourth-quarter earnings recently quieted the bears, and shares are up 25% in the past month as a result. The company posted $90 billion in revenue in the quarter, up 18% year over year. Azure and other cloud services growth surged 43%, and Azure crossed the $100 billion annual revenue milestone.
The company also showed operating leverage: it grew operating income 18% to $40.6 billion while building out data center capacity. CFO Amy Hood paired that expense discipline with a $10.2 billion cash return to shareholders via dividends and buybacks during the quarter. Unlike some Big Tech peers, such as Alphabet and Meta, Microsoft did not aggressively raise its capital expenditure plans.
Chatterjee is among the first Wall Street analysts to turn more bullish on Microsoft since the earnings report. Others may follow as they update their models after speaking with contacts and investors.
Source: Yahoo Finance
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