Microsoft (MSFT) 23% Rally Scenario Activated..."Still Undervalued"

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An analysis suggests that Microsoft (MSFT) has secured over 23% additional upside potential, driven by Wall Street's upward revision of its target price. Increased investment in artificial intelligence (AI) infrastructure and robust growth in the cloud sector are cited as catalysts for the stock's rebound.

According to Benzinga on September 21 (local time), global investment bank Cantor Fitzgerald maintained its 'Overweight' rating for Microsoft and significantly raised its target price from the previous $522 to $608. This implies an additional upside of approximately 23.13% compared to last week's closing price of $493.78.

Thomas Blakey, an analyst at Cantor Fitzgerald, evaluated that Microsoft's cloud platform Azure and enterprise AI monetization models are strongly driving performance improvement. A positive outlook for Microsoft is also dominant across Wall Street. 42 analysts from major brokerage firms maintain a 'Buy' rating, and the average target price is set at $567.07.

In its recent quarterly earnings announcement, Microsoft exceeded market expectations, reporting earnings per share (EPS) of $4.74 and revenue of $90.01 billion. Revenue increased by 17.7% year-over-year, demonstrating rapid external growth among big tech companies. Although concerns about power acquisition and capital expenditure burdens due to AI data center construction have been raised, the assessment is that robust cash generation and cloud demand are offsetting these concerns.

Major Wall Street investment banks are uniformly raising their expectations for Microsoft. Market attention is focused on whether Microsoft can break through the $500 resistance level and embark on a new high rally, using Cantor Fitzgerald's $608 target price as a springboard.

[Article Key Summary]

-Cantor Fitzgerald raised Microsoft's (MSFT) target price from $522 to $608.

-The target price of $608 implies an additional upside potential of approximately 23.13% compared to the closing price ($493.78).

-Quarterly revenue increased by 17.7% to $90.01 billion, with 42 analysts maintaining a 'Buy' rating.

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