Oppenheimer says Microsoft Azure and M365 can sustain acceleration in fiscal 2027
Oppenheimer analysts Brian Schwartz and Idan Gutkind said Microsoft’s Azure cloud unit and its M365 commercial business are positioned to keep accelerating through fiscal 2027, even as AI disruption and a pull‑forward of some enterprise IT spending could pose risks. The brokerage raised its price target on Microsoft stock to $570 from $515 and kept an outperform rating, noting that Copilot’s…
Key points
- Oppenheimer raised Microsoft price target to $570 from $515.
- Azure and M365 expected to sustain acceleration in FY2027 despite AI disruption risks.
- GPU dock‑to‑live time improved nearly 50% over the past year; Microsoft targets free‑cash‑flow positivity in FY2027.
The note highlighted that Azure demand is broadening beyond frontier labs and that GPU dock‑to‑live time has improved nearly 50% over the last 12 months. While AI investments may pressure near‑term gross margin, Oppenheimer expects better utilization, prudent operating expenditures and a growing enterprise backlog to support margin expansion. Microsoft also plans to report Azure under a new “Agents and Infra” segment from fiscal 2027 and aims to be free‑cash‑flow positive that year. The analysts cautioned that tighter AI spending controls or IT budget scrutiny could still restrain growth.
Microsoft Azure, M365 Commercial Can Sustain Acceleration in Fiscal 2027 Despite Some Risks, Oppenheimer Says
finance.yahoo.com · 22 September 2026
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