Evercore Says Microsoft Could Hit $500 Target

Moz Farooque

Fri, May 16, 2025, 6:09 AM 1 min read

Microsoft (NASDAQ:MSFT) remains a compelling semipermanent buy arsenic its AI-driven Azure maturation and robust valuation enactment successful its favor, Evercore ISI says.

• Warning! GuruFocus has detected 3 Warning Sign with MSFT.

Evercore analysts led by Kirk Materne enactment MSFT trades astatine 29x CY26 GAAP EPS, offering an charismatic risk/reward equilibrium astatine existent levels, and item Azure's AI-consumption tally complaint surpassing $14 cardinal alongside sustained 30%+ year-over-year conception growth.

They besides constituent retired that M365 Copilot revenues deed a $2.5 cardinal tally rate, underscoring the aboriginal days of endeavor AI adoption. Shares rebounded from a 17-month debased successful aboriginal April, climbing treble digits implicit the past period and closing wrong striking region of past summer's all-time high. Evercore's Outperform standing and $500 terms people bespeak that conviction.

Materne adds that arsenic AI capableness scales and the non-AI broadside of Azure stabilizes, the unreality limb should prolong 30%+ gross gains done FY26 and FY27, adjacent assuming immoderate normalization successful bequest workloads.

He besides flags that Microsoft's diversified bundle moatfrom Office 365 subscriptions to Dynamics and gamingprovides downside extortion amid broader tech-sector aggregate contraction this year. Evercore's bullish stance contrasts with assemblage skepticism, wherever tech multiples person dipped amid rising rates, but MSFT's operation of subscription resilience and AI enactment sets it apart.

To further prosecute investors, Evercore is hosting its yearly Microsoft 360 Day adjacent Tuesday, wherever absorption is expected to item data-center enlargement plans and AI roadmap milestones.

For investors, Microsoft's proven AI monetization and accordant Azure enlargement awesome durable catalysts that whitethorn underpin sustained upside and warrant holding done marketplace cycles. Investors volition oculus FY26 guidance and insights from Microsoft 360 Day adjacent week arsenic cardinal catalysts.

This nonfiction archetypal appeared connected GuruFocus.