Key Takeaways
- Citi reaffirmed “Buy” status for MSFT, highlighting artificial intelligence traction and robust cloud performance
- Q2 financial results showed $81.3B in revenue (17% YoY growth); net income surged 60% to $38.5B
- Azure platform expanded 39% year-over-year; Microsoft 365 Copilot paid user base jumped 160% YoY to 15 million
- Goldman Sachs maintained Buy recommendation with $600 target following Maia 200 chip developments
- Wall Street consensus shows 41 of 50 analysts with “Strong Buy” ratings; average target price sits at $595.60
Microsoft (MSFT) has captured fresh momentum on Wall Street, with leading financial institutions Citi and Goldman Sachs both reinforcing their bullish outlook on the tech giant in recent sessions.
Shares of MSFT are currently changing hands near $397, representing approximately 30% decline from peak levels, while the company maintains a $2.9 trillion market valuation.
Citi’s Tyler Radke sustained his Buy recommendation following discussions with Microsoft’s investor relations division. His analysis centered on three critical factors: artificial intelligence competitive landscape, cloud infrastructure capacity oversight, and capital allocation strategy.
During the December quarter, Microsoft delivered $81.3 billion in revenue, marking a 17% year-over-year improvement. Net income nearly doubled versus the comparable prior-year period, reaching $38.5 billion — representing 60% growth.
The cloud segment shined particularly bright. Microsoft’s cloud operations surpassed $50 billion in quarterly revenue for the first time ever, advancing 26% year-over-year.
Azure, the primary catalyst behind this expansion, posted 39% growth during the quarter. Current demand levels are exceeding available capacity, though Microsoft has outlined a roadmap to bridge this divide.
A key component of that strategy centers on proprietary silicon. The Maia 200 AI inference accelerator provides over 30% enhanced cost efficiency relative to its predecessor generation, according to statements from CEO Satya Nadella.
Goldman Sachs Highlights Maia 200 Progress
Goldman Sachs’ Gabriela Borges reaffirmed a Buy rating alongside a $600 price objective following Microsoft’s Maia 200 disclosure in January.
Prior to this advancement, Maia possessed limited performance benchmarks and was widely perceived as lagging behind competing chip solutions. Goldman now reports that performance metrics have become more competitive with Amazon’s Trainium and Google’s TPUs in terms of raw computational power.
Goldman identified this development as favorable for Microsoft’s price-to-performance ratio on AI computing infrastructure and its potential to ultimately achieve CPU-based Azure gross margin parity on AI-focused workloads. Microsoft’s present gross profit margin stands at 69%, with return on equity at 34%.
The investment bank did acknowledge certain constraints — including incomplete production-scale performance metrics and the requirement to expand the software infrastructure surrounding Maia.
Rapid Expansion in Copilot and GitHub Adoption
Microsoft 365 Copilot experienced seat additions at an unprecedented velocity, climbing over 160% year-over-year. The offering now serves 15 million paid seats, and Radke characterizes it as emerging into a legitimate growth catalyst for Microsoft’s commercial software operations.
GitHub Copilot has accumulated 4.7 million paid subscribers, representing 75% year-over-year expansion.
Dragon Copilot, deployed across healthcare environments, is processing 21 million patient encounters each quarter.
More than 80% of Fortune 500 enterprises maintain active AI agents constructed on Microsoft’s platform.
Among 50 Wall Street analysts tracking MSFT, 41 assign a “Strong Buy” rating, four recommend “Moderate Buy,” and five suggest “Hold.” The mean price objective stands at $595.60.
Analyst projections indicate Microsoft’s revenue will expand from $281.72 billion in fiscal 2025 to $591 billion by fiscal 2030, with earnings per share climbing from $13.64 to $31.84 across the same timeframe.
