Mar. 29 at 4:00 PM
Bank of America reinstated coverage of Microsoft with a Buy rating and a
$500 price target, calling the company “a key beneficiary of AI monetization” at the “center of the AI supercycle.” Analyst Tal Liani noted Microsoft’s advantage lies in leveraging AI across both infrastructure and applications. Azure provides the computing and data backbone for enterprise AI workloads, while software products including 365, Dynamics, GitHub, and Windows integrate AI into daily tasks.
The
$500 target implies roughly 40% upside, based on a 24x P/E for 2027, supported by expected revenue growth of 15–17% annually and Intelligent Cloud growth of 24–28% as AI workloads scale. BofA also highlighted long-term considerations such as AI-related backlog durability, the OpenAI partnership, and whether the AI cycle is structural or a bubble. CapEx is expected to rise from
$44B in 2024 to ~
$143B in 2028, with operating margins projected above 46%.
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