Deutsche Bank Reiterates Buy on Microsoft: AI Driving Efficiency Gains

Deutsche Bank reiterated a "Buy" rating on Microsoft (MSFT), citing AI-driven double-digit efficiency gains across its business processes and contributing to stronger operating margins. Analysts have a consensus "Buy" rating, with an average price target of $630 and a Street-high target of $700. Microsoft provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.

Microsoft (NASDAQ: MSFT) reported robust fourth-quarter fiscal 2025 earnings, showcasing significant growth across its cloud and AI segments. The company reported $76.4 billion in revenue, an 18% year-over-year increase in constant currency, and $3.65 in earnings per share, up 22% year-over-year [1]. This performance was driven by a 25% year-over-year growth in Microsoft Cloud revenue, with Azure annual revenue reaching $75 billion, up 34% year-over-year [1].

The company's expansion of Azure's global infrastructure to over 400 data centers across 70 regions underscores its leadership in AI infrastructure. This growth is expected to continue, with Azure's revenue forecasted to grow by approximately 37% year-over-year in constant currency for the first quarter of fiscal 2026 [1].

Microsoft's AI monetization efforts have also shown remarkable traction. The company reported that its Copilot apps have surpassed 100 million monthly active users and that Microsoft 365 Copilot has become the new standard for organizing and workflows [1]. This growth is expected to contribute to a broader recurring revenue base and future pricing power.

Analysts have been bullish on Microsoft's prospects. Deutsche Bank reiterated a "Buy" rating on Microsoft, citing AI-driven double-digit efficiency gains across its business processes and contributing to stronger operating margins [2]. The consensus analyst rating is also "Buy," with an average price target of $630 and a Street-high target of $700 [2].

Microsoft's strong financial performance and analyst optimism suggest that the company is well-positioned to continue its growth trajectory, driven by its leadership in cloud and AI technologies.

References:
[1] https://www.nasdaq.com/articles/microsoft-cloud-and-ai-revenue-soar
[2] https://coinpaper.com/10410/us-government-launches-1-open-ai-ai-access-to-streamline-operations