Analyst Derrick Wood of TD Cowen reiterated a Buy rating on Microsoft, boosting the price target to $655.00.
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Derrick Wood has given his Buy rating due to a combination of factors that highlight Microsoft’s strong financial performance and strategic positioning. Microsoft’s reported revenue growth of approximately 17% in constant currency terms for the first quarter exceeded market expectations, driven by robust demand signals, particularly in its Azure cloud services, which saw a 39% growth. Despite capacity constraints, the company is experiencing accelerating demand, as evidenced by a significant increase in remaining performance obligations and new commercial bookings.
Furthermore, Microsoft’s strategic investments, including a substantial partnership with OpenAI, are expected to drive future growth. The company’s aggressive capital expenditure plans, aimed at expanding AI capacity and data center infrastructure, underscore its commitment to meeting rising demand. Additionally, Microsoft’s record operating margin and well-managed costs contribute to its strong profitability outlook. These factors collectively support Derrick Wood’s Buy rating, reflecting confidence in Microsoft’s long-term growth potential.
Wood covers the Technology sector, focusing on stocks such as Oracle, Adobe, and Salesforce. According to TipRanks, Wood has an average return of 8.9% and a 52.62% success rate on recommended stocks.
In another report released today, Jefferies also maintained a Buy rating on the stock with a $675.00 price target.