Oppenheimer: Azure and M365 commercial versions are expected to accelerate in the 2027 fiscal year, raising the Microsoft (MSFT.US) target price to $570

The Zhitong Finance App learned that after meeting with Microsoft (MSFT.US) management, Oppenheimer raised its target price from $515 to $570 to maintain the “outperforming market” rating.

Oppenheimer analyst Brian Schwartz (Brian Schwartz) wrote in his report to clients: “After our meeting, we were convinced that our judgment on Microsoft's accelerated growth and capital discipline still holds true. In our view, Azure and M365 commercial versions are expected to maintain business acceleration in the 2027 fiscal year, as Copilot's monetization is still strong, more computing power production capacity is online, and customers are increasingly using Microsoft as the main enterprise AI platform standard. Furthermore, efficiency improvements and capital discipline are key focus points, and this year is bringing more predictable capital expenditure and positive free cash flow, unlike some of our hyperscale cloud vendors.”

Schwartz added, “Overall, there are multiple risks: disruptions brought about by AI and the early release of some enterprise IT spending in the second half of 2026 could slow Azure and M365 commercial revenue growth into the 2027 calendar year, reduce cloud business margins, and/or reduce capital expenditure efficiency.”