© Reuters. ‘The World’s Computing Platform’: Microsoft has its new biggest bull
Wall Street analysts continue to heap praise on Microsoft (NASDAQ:) as shares now trade more than 50% higher compared to the start of the year.
Today, Truist initiated research coverage with a Buy rating and a 3-year price target of $600.
“We expect many investors to be wondering where the upside potential is from here,” analysts wrote in a new coverage note.
Simply said, analysts see Microsoft as “the world’s computing platform” that is “poised to deliver further upside to expectations as projects go into production.”
“We believe MSFT can grow revenue and FCF in the mid-teens, driven by upside potential to consensus numbers in AI, Azure, and Copilot which could propel shares to compounding strong gains,” they wrote.
According to Truist’s analysis, Microsoft is expected to benefit from the strengthening AI and cloud business over the next decade, presenting various upside potentials:
1) The proof-of-concept projects undertaken this year in generative AI infrastructure are anticipated to transform into revenue in the coming years;
2) Microsoft 365 Copilot, made publicly available on November 1, is seen as a driver for both seat and average revenue per user (ARPU) growth; and
3) The security segment of the business is likely to grow in significance as customers increasingly transition to cloud-based architecture.
The firm’s survey also showed that over 80% of the group expects their Microsoft spend to go up next year, while a quarter of survey respondents see it increasing by more than 10%.
