Melius Raises Microsoft to Buy with $665 Target on AI Security Demand

Microsoft Corporation (MSFT) is gaining attention after Melius Research upgraded its stock rating to Buy from Hold, setting a price target of $665. The upgrade comes on the back of rising enterprise demand for AI security and governance solutions.

Analyst Ben Reitzes noted that Microsoft’s stock has climbed around 40% since its June low of $353, now trading near its 52-week high of $553.72. Melius has raised its fiscal 2027 earnings estimates by 2% and fiscal 2028 by 4%, while initiating a fiscal 2029 estimate of $30.77 per share, roughly 7% above the consensus. The $665 target reflects approximately 22 times the fiscal 2029 estimate.

The firm anticipates Azure’s growth to exceed 50% by the fourth quarter of fiscal 2027. Enterprises are increasingly investing in secure systems to manage AI models and agents, rather than relying on AI labs directly. This shift has sparked immediate interest in Microsoft’s security offerings, particularly following recent warnings from AI company executives about AI risks.

In other news, Microsoft announced the departure of Ryan Roslansky, the executive vice president overseeing M365 apps and former LinkedIn CEO. Meanwhile, Piper Sandler raised its price target on the stock, citing growth in Copilot and Cowork, and maintained an Overweight rating. Microsoft is set to release its first-quarter fiscal 2027 results later this month, with the Ignite conference scheduled for mid-November. At the time of publication, Microsoft shares were trading 0.42% higher at $519.69.