$Microsoft(MSFT)$ Stifel upgraded Microsoft to Buy this morning, price target $530 to $575. That's about 15% upside from yesterday's $498 close. The thesis centers on Azure plus Copilot sustaining mid-to-upper teens revenue growth.
The tension is the capex. Microsoft spent $41B in the fiscal fourth quarter and $145B for the year, and FY27 is expected to be heavier. Stifel's answer is that expense efficiency keeps margins stable and the cash flows cover it without outside financing.
Inside the note: Microsoft reworked its OpenAI contract in April. OpenAI now shares revenue with Microsoft through 2030. Some of Azure's growth is a contract, not a bet.
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