Microsoft pullback a buying opportunity, says Evercore ISI

Evercore ISI analyst Kirk Materne says Microsoft (MSFT) reported “solid” fiscal Q1 results that “beat expectations across the board.” However, shares are under some pressure as the Azure consumption growth was more in line with expectations of 33% and Azure growth guidance of 31%-32% came in a bit lower than expectations for 32%-33%. The lower-than-expected guidance was partially due to some AI capacity being pushed out to the second half and given that the company reiterated its call for Azure to accelerate in the back half, the firm sees weakness in the shares being a buying opportunity given that Microsoft’s AI offerings are on track to reach a $10B run-rate in fiscal Q2, the analyst tells investors. Evercore reiterates an Outperform rating and $500 price target on Microsoft shares.