Goldman Sachs Puts Faith in Microsoft with Conviction List Addition

Goldman Sachs has added Microsoft to its closely watched 'Conviction List', while removing Broadcom and ServiceNow. The firm's $640 price target for MSFT sits well above the current share price of $487.65.

The move comes after Microsoft reported a blockbuster fiscal Q4, with revenue hitting $90.01 billion, surpassing consensus estimates by 17.8% year over year. Azure grew 43% and crossed $100 billion in annual revenue for the first time, while Copilot reached 30 million paid seats.

Goldman argues that Microsoft has an 'ideal position' as AI moves from a trade focused on training and infrastructure to early-stage deployment in enterprises. The firm's case is based on Azure crossing $100B in annual revenue and Copilot reaching 30 million paid seats.