TD Cowen reiterated a Buy rating and $540 price target on Microsoft (NASDAQ:MSFT). The firm hosted Mary Grekstas from investor relations for virtual meetings.
The stock trades at $409.43, down 15% year-to-date. Bond.az analysis suggests the company remains undervalued. With a $3.04 trillion market cap and P/E of 24.4, Microsoft remains a key software player despite headwinds.
Microsoft expects capacity constraints through at least end-2026 but efficiency gains have freed up compute. More capacity is allocated to Azure workloads, supporting growth in H2 2026. Ramping 2GW at Fairwater and building capacity for Anthropic after a $30B commitment are new AI drivers.
Copilot adoption inflected last quarter due to accelerated innovation and improved go-to-market. Microsoft expects more net subscriber additions in Q2 vs Q1's ~5 million. New drivers include E7 bundle and Copilot Cowork.
For GitHub Copilot, new per-user plus consumption pricing aims to expand TAM and capture value from agentic usage. AI workloads continue driving consumption of Microsoft services.
Dynamics 365 bookings commentary noted softer growth in Q2 guidance as customers shift to seats-plus-agents. Dynamics 365 consumption revenue can fall into M365 or Azure.
In other news, Microsoft added Carmine Di Sibio to its board. LinkedIn plans to cut ~5% of workforce. OpenAI revenue-sharing capped at $38B. US Commerce Dept removed AI testing details from website.
