UBS analysts remain bullish on Microsoft (NASDAQ:MSFT), maintaining a Buy rating and a $520 price target. They believe the company’s AI story is a significant growth driver, justifying the high valuation despite tight IT budgets.
The analysts highlight Azure’s potential upside from AI, projecting strong growth in the coming quarters. They also anticipate continued capital expenditure, with an estimate of $73 billion for FY25. While Office 365 growth may be limited in the short term, they see potential for Copilot to provide a significant upside surprise by 2Q/Dec 2024.
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UBS projects robust EPS growth for Microsoft, driven by its strong AI position and fundamentals. They believe the company can offset the impact of tight IT budgets with its AI-driven growth opportunities.