Goldman Sachs Revises Microsoft's “Buy” Rating and $450 Stock Target

Goldman Sachs announced a report stating that Microsoft's quarterly financial results for the second quarter of 2024 were strong, Azure's growth rate exceeded 28% and the bank's 27% forecast, the company's sales increased 18% and exceeded market expectations by 1.4%, and profit per share was 2.93 US dollars, which exceeded expectations by 6%. The bank thought that Microsoft's artificial intelligence (AI) service would bring about strong growth, left the “buy” rating unchanged, and set the target stock price to 450 dollars. The bank believes that since companies have yet to allocate large IT budgets to generative artificial intelligence (GenAI), there is a possibility that larger releases will be carried out if the macro environment improves, which will promote Microsoft's more specific growth next year. Furthermore, Microsoft's large server infrastructure will provide the company with a unique competitive advantage and is expected to lead to over $100 billion in Azure revenue over the long term. The bank is convinced that the Azure business will grow to 200 billion dollars in fiscal 2029 due to the strengthening of the GenAI cycle.