MSFT Gets A Bullish Call From Melius — Analyst Says AI Fears Could Benefit Leaders Like Microsoft

• Melius Research analyst Ben Reitzes upgraded Microsoft to 'Buy' from 'Hold' with a $665 price target. 
• Scotiabank sees Microsoft as a key player in the shift toward enterprise AI.
• Wells Fargo recently raised its price target to $725 from $700 and added Microsoft to its Q4 'Tactical Ideas list,' citing its AI advantage and AI monetization opportunity.

Microsoft (MSFT) was in focus on Monday after Melius Research upgraded the stock to 'Buy' from 'Hold', saying concerns around AI risks could make companies such as Microsoft and cybersecurity providers increasingly important. 

Scotiabank separately raised its price target on Microsoft to $615 from $510 while maintaining an 'Outperform' rating.

MSFT shares were trading 1.70% higher at the time of writing on Monday.

Melius Upgrades Microsoft To 'Buy'

According to TheFly, Melius Research analyst Ben Reitzes upgraded Microsoft to 'Buy' from 'Hold' with a $665 price target. 

The firm said Microsoft and cybersecurity companies could become increasingly important as AI leaders discuss the risks associated with the technology. Melius believes leaders such as Microsoft could benefit from AI fears, TheFly reported.

Melius also said enterprises are spending on a secure wrapper that can route models to the right task and secure AI agents.

Scotiabank Raises Microsoft Price Target

Separately, Scotiabank analyst Patrick Colville raised the firm's price target on Microsoft to $615 from $510 while maintaining an 'Outperform' rating, according to TheFly.

The firm named Microsoft among the enterprise software winners from OpenAI's recent business-to-business push. Scotiabank also said Microsoft is at the forefront of the enterprise AI revolution.

Analysts See Microsoft Benefiting From AI Monetization

Recently, Wells Fargo analyst Michael Turrin raised the firm's price target on Microsoft to $725 from $700 while maintaining an 'Overweight' rating and added the stock to its Q4 'Tactical Ideas list'. 

Turrin cited Microsoft's AI advantage, the upcoming Ignite conference, and new segment reporting as key catalysts, according to TheFly.

Wells Fargo also said momentum was shifting back toward Microsoft among mega-cap technology companies as the company delivers on its AI monetization strategy alongside a balanced investment approach.

Azure Demand Supports AI Growth

Microsoft has said customer demand for Azure continues to exceed available capacity. In its fiscal fourth-quarter earnings call, the company said it added another gigawatt of capacity and remained on track to roughly double its overall capacity in two years.

Microsoft also reported that revenue from Azure and other cloud services grew 43% year over year in the fiscal fourth quarter.

The company also said Microsoft 365 Copilot surpassed 30 million paid seats, with net seat additions more than doubling quarter over quarter in the fourth quarter.

How Do Retail Traders Feel About MSFT?

On Stocktwits, retail sentiment toward MSFT remained 'Bullish' over the past 24 hours, while message volume was 'Low' and the participation ratio was 'High'.

MSFT shares have gained more than 8% year to date.

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