Overview
- Bank of America raised its price target on Microsoft to $600 on Tuesday, Sept. 1, applying a higher multiple as evidence of AI monetization mounted.
- Microsoft reported a record fiscal year with revenue above $331 billion and disclosed Azure has topped $100 billion in annualized revenue while Azure growth accelerated to about 43% in fiscal Q4 and management guided roughly 45% for Q1 FY27.
- Paid Microsoft 365 Copilot subscriptions exceeded 30 million and net additions more than doubled sequentially, and remaining performance obligations rose about 84% year‑over‑year, giving multi‑quarter revenue visibility.
- Capital expenditures surged to roughly $116 billion in FY26 and management guided FY27 capex near $175 billion, a spending wave that has reduced free cash flow and remains the key risk to margins.
- Wall Street sentiment has tilted bullish with a FactSet consensus target in the mid‑$500s and several firms raising estimates, but the market re‑rating will depend on sustained Azure/Copilot revenue conversion, margin trends, and the pace and cost of AI infrastructure build‑out.