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2025-08-01 14:42:03
Citigroup Raises Microsoft's Price Target to $680, Maintaining its Top Mega-Cap Stocks Citigroup issued a report stating that Microsoft's fourth-quarter performance exceeded expectations across the board, further highlighting Azure's accelerated growth and validating Microsoft's leadership in market share gains and AI monetization. While Azure's growth acceleration of 4 percentage points on a $75 billion annualized revenue base is impressive, even more impressive is the drivers (demand from a broad range of large customers, not just capacity timing), suggesting more sustained strength entering the current fiscal year, particularly with accelerating commercial order growth and the positive revisions to preliminary guidance for the current quarter. The bank has again raised its Azure growth forecast for the current fiscal year by 2 percentage points. With more capacity coming online, the optimistic scenario of Azure growing over 40% year-over-year in the current fiscal year looks more plausible. Microsoft's leadership in generative AI, combined with its view of accelerating revenue and profit growth, maintains its position as the bank's top mega-cap stock. The bank has raised its price target to $680, representing a forward P/E ratio of 43 times, with a "Buy" rating.
