Overview
- Microsoft shares fell about 2.4% intraday to $472.26 on Friday as investors reassessed its AI positioning versus Google.
- Ravenswood’s John Freeman favored Microsoft, citing Azure’s lead and the cushion from Windows and Microsoft 365, while Epistrophy’s Corey Johnson warned AI could cannibalize Google’s click-driven model.
- Morgan Stanley kept Microsoft as its top large-cap software pick with a Buy rating and a $650 target, highlighting robust demand and Azure AI margin upside.
- The bank modeled Azure AI gross margins rising from roughly 20% today to around 30% by FY29, with potential to exceed 40% over time.
- Microsoft’s infrastructure buildout continues, including a CAD 19 billion investment in Canada through 2027, as attention turns to the Jan. 28 earnings report with estimates of $3.96 EPS on $80.27 billion in revenue.