Street View: Azure keeps Microsoft's AI party going

Microsoft

Yesterday 08:13

** Microsoft MSFT.O beat Wall St estimates for Q1 cloud revenue on Wednesday, with strong growth in Azure indicating hefty investments in AI were paying off
** Shares up 4% in premarket trading
     
AZURE'S AI SUGAR RUSH ISN'T OVER YET
** J.P. Morgan ("overweight", PT: $625) says Azure is set for another quarter of acceleration despite capacity constraints, with MSFT remaining well positioned to fund AI investments while sustaining earnings and FCF growth
** Barclays ("overweight", PT: $610) says Azure growth is approaching 50% and capacity additions in the second half suggest the AI-driven growth story still has room to run, while Office growth is expected to keep accelerating in coming quarters
** Piper Sandler ("overweight", PT: $650) says co's ability to monetize infrastructure efficiencies and growing Copilot adoption should support continued Azure and commercial cloud growth acceleration
** Morgan Stanley ("overweight", PT $650) says engineering efficiencies are creating additional capacity that Microsoft can monetize, supporting further Azure growth while helping offset heavy AI investment
     

 (Reporting by Rashika Singh in Bengaluru)
 ((rashika.singh@thomsonreuters.com))