Stifel Ups Microsoft Stock Rating to Buy Amid AI Growth Prospects

Microsoft has received a positive upgrade from Stifel, which raised its stock rating to Buy from Hold. The firm also increased its price target for Microsoft to $575 from $530.

The upgrade is based on the company's ability to sustain mid-to-upper teens revenue growth, with 17.79% revenue growth over the last twelve months and analysts projecting 18% growth ahead.

Stifel analyst Brad Reback noted that open-weight model advancement has strengthened Microsoft's large language model agnostic strategy across Azure and Copilot products.

The firm expects accelerating revenue growth driven by operational efficiencies, new datacenter capacity coming online, and a growing revenue share from OpenAI in Azure. For Microsoft 365, product improvements should enable sustained Copilot adoption, combined with growing GitHub consumption supporting mid-to-upper teens growth.