Melius Research analyst Ben Reitzes upgraded Microsoft to buy and lifted his price target to $665, reversing a hold rating he had held since February. Reitzes argues Microsoft's steady leadership and enterprise-focused Copilot pivot position it to benefit as AI-safety concerns push companies toward more established providers.
Melius Research analyst Ben Reitzes upgraded Microsoft to buy from hold on Monday, reversing a rating he had held since a February downgrade. He also raised his price target to $665 from $465, implying more than 25% upside from levels around $525.
Titled "The adults are in charge," the note argues Microsoft's experienced leadership will be rewarded by clients and investors in the next phase of artificial intelligence. According to Reitzes: "The adults are in charge" sums up his case that steady management now separates Microsoft from newer, more erratic AI labs.
AI safety fears strengthen Microsoft's hand
Reitzes pointed to recent AI-safety concerns raised by Anthropic CEO Dario Amodei, arguing the fallout boosted demand for Microsoft and the cybersecurity partners that guard against data-privacy and rogue-agent risks. He sees mature players like Microsoft as a key cog in security and governance work that is likely still in its early innings. Reitzes said he held this same bullish view on Microsoft last year before turning more bearish over issues with Azure and Copilot, citing last month's repackaging of Copilot with Autopilot for agents as a product that could help enterprises manage that risk.
Enterprise Copilot pivot reshapes the growth case
Reitzes wrote that Microsoft's prospects in core apps and Azure are stronger than he previously expected, since the company may be better insulated from threats posed by AI agents built on rival platforms. He also sees a credible path for Azure's growth rate to exceed 50% as computing supply catches up with demand, pricing firms, and OpenAI's usage ramps up. Microsoft remains a key provider of computing power to OpenAI even as the relationship between the two companies has evolved since ChatGPT's 2022 launch, a shift Reitzes said has let Microsoft grow more model-agnostic.
Shares near record highs, Meta shows the playbook working
Microsoft shares trade about 3% below their record-high close of $542 reached on Oct. 28, 2025, after surging 50% from a 52-week low of $349 in late June. CNBC's Investing Club, which holds Microsoft inside Jim Cramer's Charitable Trust, keeps a hold-equivalent rating and a $550 price target following strong quarterly results reported in July.
Meta Platforms shares have climbed more than 20% since launching its Muse personal AI agent in early September, before the company extended the product to small businesses. For Reitzes, that reaction shows what companies build on top of AI models matters more to investors than the models' own benchmark results.
Reitzes frames Microsoft's strategy as owning the identity, governance and billing layers around AI agents, so it still captures value even as the underlying models themselves become a commodity input.
Source: CNBC Investing Club
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