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Microsoft’s efforts to meet the demands of the AI boom may be slow-going, but the technology company is still slated to notch impressive growth from its ties to the industry, as well as from several of its enterprise solutions, according to Morgan Stanley. The investment firm, which has an overweight rating on shares, raised its price target for Microsoft to $625 from $582, implying 18.9% upside. The bank also named Microsoft a top pick. “Sustained momentum on the top-line [and] better appreciation of the breadth of growth drivers…should drive shares toward our upwardly revised $625 price target,” Morgan Stanley analyst Keith Weiss said Friday in a note to clients. Microsoft is poised to grow, in large part, due to its Azure cloud computing platform’s growth amid an enterprise spending boom. In one survey, 49% of CIOs cited Azure as the likely top IT budget share gainer over the next three years, according to Morgan Stanley. MSFT YTD mountain MSFT year to date The cloud computing platform also grew 39% in constant currency year over year, the note showed. Microsoft’s cloud is also uniquely positioned to benefit from AI-industry tailwinds, the analysts noted. “With its integration of the OpenAI model family, Microsoft has already gained a large group of new commercial applications,” Weiss wrote, adding that many enterprise software and internet vendors have integrated their solutions with the AI maker’s Chat GPT. “With AI workloads set to become a larger portion of cloud spend and driving an increase in the percentage of workloads in the cloud higher, Azure is well positioned to benefit,” he added. The analyst also noted that Microsoft, unlike Amazon, can serve a wider variety of clients across the Cloud market. Microsoft serves as Switzerland in the Cloud market, and does not compete with customers like Amazon does in Retail, Healthcare, Logistics, Entertainment, etc., he wrote. “This competitive dynamic creates a market preference to utilize a more independent cloud provider.” Morgan Stanley’s call falls in line with most analysts on the Street. Of the 64 Wall Street shops that have initiated coverage on Microsoft, 60 have a buy or strong buy rating on the stock, per LSEG. Microsoft shares edged down 0.61% in pre-market trading on Friday. The stock has risen roughly 20% year to date. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
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