MSFT Stock Gains: Melius Research Calls Microsoft ‘Adults In Charge’ Of AI, Upgrades To ‘Buy’

• Microsoft is trading at an all-time high after a strong run in the past few months.
• Scotiabank and Piper Sandler also raised their price targets, citing Microsoft’s enterprise AI opportunity.
• Stocktwits sentiment for MSFT was ‘neutral’ as of late Monday.

Microsoft Corp. (MSFT) shares gained 1.5% on Monday and inched higher overnight after Melius Research upgraded the software giant to ‘Buy’ from ‘Hold,’ arguing that growing concerns around AI risks could strengthen the case for established technology leaders.

Melius set a $665 price target, which implies a 27% upside from the stock’s Monday close, saying Microsoft and cybersecurity companies are becoming “even more needed” as AI leaders increasingly warn about the technology’s potential risks to humanity. 

Scotiabank also raised its price target on Microsoft, adding to the bullish calls as the stock enters a period of strength. MSFT surged nearly 38% from July through September, marking its best quarterly performance since 1998 and the strongest gain among the Magnificent Seven during the period. 

The stock has gained 2.4% so far in October to a fresh high.

Microsoft Seen As AI’s ‘Adults In Charge’

Melius believes enterprises are increasingly looking for a secure layer that can route AI models to the right tasks while securing autonomous AI agents. That dynamic could benefit Microsoft as businesses prioritize trusted platforms for deploying AI at scale.

The research firm noted that Microsoft CEO Satya Nadella and his team are increasingly likely to be viewed as the “adults in charge” of AI, positioning the company to benefit from stronger pricing trends and additional upside as Azure capacity expands.

Scotiabank raised its MSFT price target to $615 from $510 while maintaining an ‘Outperform’ rating. The research firm named Microsoft among the enterprise software winners from OpenAI’s push further into business-to-business applications.

“It's Co-Pilot's time! MSFT going higher. Big move coming,” CNBC analyst Jim Cramer posted on X.

AI And Azure Momentum Reignite MSFT

The strong momentum follows Microsoft’s fiscal fourth-quarter results, issued on July 29, which showed Azure growth accelerating 43% year over year. Revenue rose 18% to $90 billion, while Microsoft forecast 45% Azure growth for the first quarter of fiscal 2027 on a constant-currency basis.

The company has also been expanding its AI software ecosystem. Microsoft 365 Copilot surpassed 30 million paid seats, while Agent 365 had nearly 40 million registered agents across tens of thousands of companies.

OpenAI’s recent Dots launch provided another positive read-through. “We think one of the few positive read-throughs was MSFT, given Dots will integrate with Microsoft Agent 365,” Piper Sandler said in a recent note while raising its Microsoft price target to $610 from $550.

Currently, 55 of 56 analysts have a ‘Buy’ or higher rating on MSFT, with one analyst rating it ‘Hold,’ per Koyfin data. Their average price target of 528.60 implies only 0.6% upside from the last close.

Retail View On MSFT

On Stocktwits, the retail sentiment for MSFT was 'neutral,’ unchanged from the previous day, with several traders posting about the upgrades.

“MSFT that escalated quickly,” a trader said, while another wrote, “$MSFT Kids calling it garbage as it climbs higher slowly on a day to day. MSFT is a getting rich slow scheme.”

Earlier in the day, The Information reported that the Windows maker along with Meta Platforms are taking steps to reduce their workforce's internal reliance on Anthropic’s Claude AI models.

Microsoft executives anticipated spending at least $1 billion annually on internal staff usage of Anthropic models. That projected run rate has since been reduced by more than a third, according to the report. 

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