Microsoft (MSFT) Price Target Lowered at Stifel on Margin Pressure Concerns

Stifel anticipates Microsoft to transcend expectations for Azure unreality services maturation by an estimated 200 ground points, reaching 39% maturation connected a changeless currency basis. This is supported by factors specified arsenic a coagulated macro backdrop, continued accelerated OpenAI usage growth, and management’s commentary that request inactive exceeds Azure supply.

Looking ahead, adjacent though 3Q26 represents a tougher year-over-year examination for Azure, caller information halfway capableness expansions should let Microsoft to station a akin level of incremental sequential adds arsenic 3Q25. This volition apt pb to an estimated 38% year-over-year changeless currency maturation guide, including a grade of conservatism.

The steadfast anticipates operating borderline unit passim FY26 arsenic gross margins compress and operating expenses emergence for “high-priced AI professionals (salary/compute)”

Net/net, we judge for the banal to efficaciously re-rate successful coming quarters, the institution indispensable get to a constituent wherever Azure maturation meaningfully outpaces Capex maturation rates (hopefully FY27).

Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and concern solutions, focusing connected efficiency, security, and AI advancements.

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