Microsoft (MSFT) Stock Is a Scotiabank Top Pick as Earnings Near

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Microsoft (MSFT) stock rose 1% to $527.47 in premarket trading Monday, after closing Friday at $524.51.
The stock is up 34% since its July 29 earnings report and hit a record close of $543.45 on Oct. 13.
Scotiabank raised its price target to $625 and expects Azure growth of 47% to 48%.
Cantor and Morgan Stanley kept Overweight ratings, with targets of $608 and $600.
Microsoft reports fiscal first-quarter earnings Wednesday after the close, and options point to a move of about 5%.

Microsoft (MSFT) stock rose 1% to $527.47 in premarket trading on Monday. It ended Friday up 1% at $524.51.

The stock hit a record close of $543.45 on Oct. 13. It has climbed 34% since the July 29 earnings report.

That report showed investors the company’s AI spending was paying off. Wall Street is not sweating the bill.

Microsoft reports fiscal first-quarter results after the close on Wednesday. Options data points to a move of about 5% in either direction.

What Analysts Expect From Azure

Scotiabank analyst Patrick Colville raised his price target to $625 from $615. He kept a Sector Outperform rating.

Colville put Microsoft on the firm’s Top Pick List. He expects Azure growth of 47% to 48%, with upside above 49%.

The firm sees Azure growth of 48% to 50% in the second quarter. Its checks on Copilot remain positive.

Scotiabank also likes early signs from CoWork. It does not expect management to give capital spending guidance for fiscal 2027 or calendar 2027.

Cantor analyst Thomas Blakey kept an Overweight rating and a $608 target. He said capex will be in focus, with spending in fiscal 2027 expected to be much higher.

Blakey expects continued growth in Copilot and Azure. He calls Microsoft the “enterprise AI orchestration layer.”

Spending and Valuation

Capital spending reached $41 billion in the fiscal fourth quarter and $145 billion for the year. Bulls say that outlay is what drives Azure and Copilot.

Morgan Stanley’s Adam Wood holds an Overweight rating and a $600 target. He sees more AI model competition as a plus, since more models mean more Azure use.

Oppenheimer also has a $625 target, while Piper Sandler is at $610. Guggenheim has a Buy rating and a $586 target, citing risks in M365 Commercial Cloud and Windows OEM & Devices.

Microsoft trades near 25 times estimated calendar 2027 earnings. Its current P/E is 29.17 on a market value of $3.9 trillion.

The company says its new reporting structure takes effect in fiscal 2027. It should give investors a clearer look at cloud and AI results.

The average rating is Buy with a $599.14 target, according to 59 firms polled by FactSet. Earnings arrive Wednesday after the close.