Morgan Stanley raised the firm’s price target on Microsoft (MSFT) to $625 from $582 and keeps an Overweight rating on the shares. The firm also elevated the shares to top pick status in software, replacing Atlassian (TEAM). Morgan Stanley understands the concerns around Microsoft from OpenAI’s contract with Oracle (ORCL), but says the deal contract likely points to Microsoft’s capacity constraints and its preference to serve a higher margin enterprise customer. Azure’s growth acceleration is not only driven by OpenAI, as its artificial intelligence strength is backed by broader products and customers, the analyst tells investors in a research note. Morgan Stanley views Microsoft shares as undervalued at current levels.
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