Larry Ramer
1 min read
In This Article:
On May 15, Citi increased its price target on Microsoft Corporation (MSFT) to $540 from $480 while keeping a Buy rating on the shares.
The bank raised its estimates for Microsoft's cloud unit, Azure, and is upbeat on its AI offerings. Citi also reacted positively to Microsoft Corporation (MSFT)'s decision to lay off 3% of its workforce.
Why Citi Is Bullish on Microsoft Corporation (MSFT)
The bank pointed out that MSFT had expressed confidence in the demand for its cloud products and reported that it plans to increase its capital spending going forward. As a result, Citi raised its estimates for MSFT's cloud unit, Azure. The bank now expects Azure's sales to surge at least 30% in MSFT's fiscal 2026.
Citi also believes that the company's layoffs will improve its financial results.
Finally, the bank asserts that Microsoft Corporation (MSFT) remains a leader in generative AI.
The Recent Performance of MSFT Stock
In the last three months, the stock has gained 11%, while it has soared 24% in the last month.
While we acknowledge the potential of MSFT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
