Microsoft price target lowered to $475 from $515 at Stifel

Stifel lowered the firm’s price target on Microsoft (MSFT) to $475 from $515 and keeps a Buy rating on the shares after having spent time traveling with members of the company’s investor relations team. Given investor sentiment and near singular focus on capex intensity, the meetings served to reinforce the firm’s belief that the stock is likely range bound until the market gains comfort that Azure/Commercial Cloud growth can sustainably run ahead of capex increases, much like it did before management began the current genAI capex ramp, the analyst says. While the firm continues to expect the rapidly emerging genAI cycle to allow Microsoft to sustain double-digit revenue and profitability growth for years to come, it lowers its target based on the higher capex assumptions after management reiterated a roughly $87B FY25 all-up capex guidance and its belief FY26 growth will slow.