Microsoft Stock Climbs As Morgan Stanley Names It Top Pick In Software

Sep 26 - Microsoft MSFT moved higher Friday morning, rising 1.5% after Morgan Stanley elevated the software giant to its Top Pick in the sector. The upgrade came as analyst Keith Weiss raised his price target to $625 from $582 while keeping an Overweight rating.

Weiss acknowledged recent investor worries around Microsoft's ties with OpenAI, Azure's momentum, and the durability of its productivity apps in the age of agentic computing. However, he argued the data points suggest strength, not weakness. He pointed to OpenAI's recent $300 billion deal with Oracle as an example, saying the move should not be seen as a negative for Microsoft but rather as an opportunity for it to optimize resources for enterprise customers.

On Azure, Weiss explained that growth goes well beyond generative AI. His team's capex analysis signals strong upside from AI-related investments. Meanwhile, surveys continue to show Microsoft's productivity apps hold durable market share, reinforcing confidence in steady growth.

Weiss concluded his opinion by saying there is a combination of sameteens growth, restrained expenditure, buybacks, and dividends that assist in a profile of high-teens returns that indicate Microsoft is still underestimated.