Bank of America analyst Tal Liani released a forward-looking research report, further shifting his views on Microsoft to optimism. Analysts maintained the buying rating, with a target price of $500, raised profit expectations for the next two fiscal years, and clearly set out the key indicators needed to be achieved for a steady recovery in stock prices. The core logic behind Liani's bullish outlook is valuation. According to his estimate of the profit forecast for fiscal year 2027, Microsoft's current price-earnings ratio is about 19 times, while the company's five-year average price-earnings ratio is 29 times. In his view, the valuation gap is due to market concerns about short-term capital expenditure pressure rather than problems with corporate fundamentals. He believes that the market has unduly lowered the valuation of Microsoft's long-term profitability, and the July 29 earnings report may become the starting point for valuation repair. According to Microsoft's previous guidance, the year-on-year growth rate of Azure revenue fell in the mid-30% to 40% range for this quarter. The Bank of America model estimates that the growth rate is at the center of this range. Liani bluntly pointed out the stock price trend corresponding to the data. “If we want to strengthen the stock price, Azure's year-on-year growth rate will reach at least 39% to 40%; once it falls short of expectations, the market's doubts about the return on investment in artificial intelligence will increase.”

Bank of America analyst Tal Liani released a forward-looking research report, further shifting his views on Microsoft to optimism. Analysts maintained the buying rating, with a target price of $500, raised profit expectations for the next two fiscal years, and clearly set out the key indicators needed to be achieved for a steady recovery in stock prices. The core logic behind Liani's bullish outlook is valuation. According to his estimate of the profit forecast for fiscal year 2027, Microsoft's current price-earnings ratio is about 19 times, while the company's five-year average price-earnings ratio is 29 times. In his view, the valuation gap is due to market concerns about short-term capital expenditure pressure rather than problems with corporate fundamentals. He believes that the market has unduly lowered the valuation of Microsoft's long-term profitability, and the July 29 earnings report may become the starting point for valuation repair. According to Microsoft's previous guidance, the year-on-year growth rate of Azure revenue fell in the mid-30% to 40% range for this quarter. The Bank of America model estimates that the growth rate is at the center of this range. Liani bluntly pointed out the stock price trend corresponding to the data. “If we want to strengthen the stock price, Azure's year-on-year growth rate will reach at least 39% to 40%; once it falls short of expectations, the market's doubts about the return on investment in artificial intelligence will increase.”