Bernstein SocGen Group has raised its price target for Microsoft stock to $722, up from $662, while maintaining an Outperform rating. The new target suggests significant upside potential, with InvestingPro analysis indicating that Microsoft is undervalued at current levels. The stock trades at a P/E ratio of 29.4 and a PEG ratio of 0.93, making it an attractive investment relative to its growth prospects.
Microsoft reported strong quarterly results, beating expectations across all major metrics. Azure, the company's cloud service, grew by 48% in constant currency and is expected to grow by 49-50% in the next quarter. Microsoft 365 Commercial Cloud also showed acceleration during the period. The stock rose 3% in after-market trading following the results, bringing it closer to its 52-week high of $551. Shares have gained over 25% in the past six months.
Capital expenditures were lower than expected due to delays in capacity additions, but Microsoft drove efficiencies across Azure that enabled strong performance and guidance despite these delays. Bernstein expects these efficiencies to benefit margins and performance in future years.
In other recent news, Microsoft reported impressive financial results for the first quarter of fiscal year 2027. Revenue reached $92.3 billion, a 19% increase from the previous year, with operating income of $45.9 billion, up 21% year-over-year. Earnings per share hit $4.89, surpassing projections of $4.72. Morgan Stanley raised its price target to $650, citing strong cloud momentum, while Barclays increased its target to $610, acknowledging Azure’s near 50% growth.