Microsoft may rely on security and custom chips to revive cloud margins
Analyst commentary on Microsoft Corp. (MSFT) notes a split market view: investors are losing confidence in the AI trade while enterprise AI adoption speeds up. The author believes Microsoft is positioning its security focus and silicon‑to‑software strategy—highlighting the Maia 200/300 custom chips—to restore Intelligent Cloud margin growth, with material benefits expected by eFY28. The analyst…
Key points
- Analyst rates Microsoft Strong Buy with $765 target, 20.20x eFY28 EV/EBITDA.
- Security focus and Maia 200/300 chips aim to boost cloud margins by eFY28.
- Risks: agentic AI cannibalization, device cost rise, enterprise AI security worries.
Key risks mentioned include possible cannibalization from agentic AI, higher device costs, and delayed enterprise AI uptake due to security concerns. The piece includes full analyst disclosures, stating no current holdings but the possibility of initiating a long position or buying call options within the next 72 hours. The commentary does not constitute investment advice and reflects the author’s own opinions, not those of Seeking Alpha.
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5 episodes →- Microsoft may rely on security and custom chips to revive cloud marginsthis story
Microsoft: Security And Silicon Set The Stage For Cloud Margin Recovery
seekingalpha.com · 23 October 2026
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