BNP Paribas Ups Microsoft to 'Buy' with $549 Price Target Amid Azure Pricing Optimism

BNP Paribas has assigned a 'Buy' rating to Microsoft (MSFT.US), with a price target of $549. Analyst Stefan Swozowski believes that Microsoft still has room to raise Azure prices in the long term.

According to Swozowski, Microsoft executives acknowledged that Azure pricing is increasing, but emphasized that existing contracts will not be terminated and prices will only rise upon contract renewal.

This means that any Azure pricing benefits will gradually roll into performance rather than delivering a substantial step-change in Azure growth in the short term.

Microsoft also reiterated that its recent strong Azure momentum is not price-driven, but rather due to fleet-wide efficiency gains and ongoing capacity ramp-up.