Microsoft's latest earnings beat the Street. Here's what analysts are saying
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Microsoft blew past expectations in its fiscal first-quarter report , leading Wall Street analysts to become even more bullish on the hyperscaler. The company reported adjusted earnings of $4.89 per share, topping an LSEG estimate of $4.73 per share . Revenue came in at $92.28 billion — a 19% increase on a year-over-year basis and well above the $90.69 billion anticipated by Wall Street. The company also reported 48% growth in its Azure cloud infrastructure business for the same period. Microsoft executives told investors on Wednesday that they expect Azure to notch between 49% to 50% growth at constant currency for the fiscal second quarter, beating the 45.1% StreetAccount consensus estimate. Shares were up around 2% in premarket trading. The stock has rallied 36% over the past three months as Microsoft has continued building out its data center infrastructure to support widening artificial intelligence adoption. Deutsche Bank analyst Brad Zelnick said that infrastructure buildout is likely to continue serving as a significant source of upside for Microsoft, particularly as the firm improves monetization of its AI-related efforts. "With AI adoption and monetization broadening across the stack, and operating leverage offsetting the elevated investment required to capitalize on outsized demand, we see further support for our positive view on the stock," Zelnick wrote in a Thursday note to clients. Deutsche Bank has a buy rating on Microsoft and a $600 price target on shares, suggesting 13% upside from Wednesday's close. Here's what else analysts are saying about Microsoft. JPMorgan: Overweight rating, $625 target JPMorgan's price target of $625 implies nearly 18% upside from here. "Microsoft delivered a print and outlook that should reinforce the bull thesis around compute efficiencies supporting a broad-based acceleration in growth, with the F2Q27 (Dec-end) Azure guide squarely meeting the buyside bar for a 100-200 bps further acceleration despite some 3P GPU capacity slipping into 2H and also at the same time delivering to the M365 Commercial Cloud growth drivers supported in part by ramping Copilot adoption." Wells Fargo: Overweight, $750 The bank increased its price target on shares to $750 from $725, implying a gain of 41%. "Azure continues to deliver meaningful upside to estimates even despite DC delays, while M365 Cloud is still expected to accel throughout the yr even off a higher base. Both key metrics continuing to inflect higher." Barclays: Overweight, $610 Analysts at the bank hiked their price target on the stock to $610 from $600, pointing to a 15% gain. "We see MSFT shares continue to work from here. With Azure growth now in the high 40s YoY and Office growth in the high teens and accelerating further from here, we can see how AI is helping MSFT growth from several vectors. Given how early the AI theme is, this can continue. Morgan Stanley: Overweight, $650 Morgan Stanley raised its price target to $650 from $600, implying 22% upside. "With growth accelerating, AI monetization broadening, and infrastructure efficiencies supporting operating leverage, we view the Q1 print as another clear validation of our thesis that Microsoft's AI investments can drive durable high-teens revenue growth and > 20% earnings growth." Citi: Buy, $680 The bank's $680 target, up from $636, signals upside of 28%. "Microsoft's strong F1Q27 results demonstrated AI tailwinds across multiple fronts with broad-based upside across Azure, and strength in CoPilot/M365." Deutsche Bank: Buy, $650 "With AI adoption and monetization broadening across the stack, and operating leverage offsetting the elevated investment required to capitalize on outsized demand, we see further support for our positive view on the stock." Bank of America: Buy, $630 The bank raised its price target to $630 from $600. "MSFT's positioning across infrastructure, models and software continues to provide multiple paths to monetize AI demand." Goldman Sachs: Buy, $700 The bank's $700 target implies upside of 32%. "Microsoft illustrated several proofpoints that suggest its strategy on enabling AI in the enterprise is working into 2027, with respect to both apps and its platform/infrastructure business." Citizens: Market outperform, $625 Citizens anticipates the stock will rise to $625, up from a prior view of $550. "While Microsoft's consumer business remains soft, with Devices and Consumer revenue down 3% y/y and Windows OEM and devices revenue guided to decline in the mid-30s in F2Q27, we believe the company is well-positioned with enterprises, where demand for Azure continues to exceed supply, and we continue to view the stock as an attractive opportunity for long-term capital appreciation."