Microsoft's Partnership with OpenAI Drives Azure's AI Lead, Boosting Stock to $650 Target

Microsoft (MSFT) gets a $650 price target from DA Davidson analyst Gil Luria, citing the company's tight commercial relationship with OpenAI and the benefits it brings to Azure's AI lead. The firm highlighted the acceleration of Azure OpenAI Services in Q4 2025, which is elevating other AI services and core hyperscaler services on Azure.

Microsoft Corporation (NASDAQ: MSFT) has received a renewed Buy rating and a $650 price target from DA Davidson analyst Gil Luria, following OpenAI's recent release of its latest model, GPT-OSS [1]. The analyst underscored the significance of Microsoft's commercial relationship with OpenAI, which is driving substantial gains for the company, particularly in its Azure cloud services.

Luria highlighted the material acceleration of Azure OpenAI Services in the fourth fiscal quarter of 2025, noting that this acceleration is elevating other AI services and core hyperscaler services on Azure, which are growing faster than comparable product sets on Google Cloud Platform (NASDAQ: GOOGL) or Amazon Web Services (NASDAQ: AMZN) [2].

Microsoft's partnership with OpenAI, which grants it right-of-first-refusal on either training or inference, has been a notable driver of Azure's recent outperformance over its hyperscaler peers. This strategic relationship is enabling Microsoft to leverage advanced AI capabilities to stay competitive in the rapidly evolving tech landscape.

The integration of OpenAI's latest model, GPT-5, across Microsoft's Copilot ecosystem, including Microsoft 365, GitHub, and Azure AI, further underscores the company's commitment to leveraging cutting-edge AI technology to enhance productivity and development tools [3]. This move not only demonstrates Microsoft's leadership in AI but also its ability to adapt and integrate new technologies to maintain a competitive edge.

While Microsoft remains a strong player in the tech sector, certain AI stocks may offer greater upside potential and carry less downside risk. However, the recent developments, including the acceleration of Azure OpenAI Services and the integration of GPT-5, suggest that Microsoft's stock may continue to perform well in the near future.

References:
[1] https://ca.finance.yahoo.com/news/microsoft-msft-gets-650-target-200552532.html
[2] https://www.investing.com/news/analyst-ratings/da-davidson-reiterates-buy-rating-on-microsoft-stock-amid-openai-release-93CH-4174010
[3] https://theoutpost.ai/news-story/microsoft-integrates-open-ai-s-gpt-5-into-copilot-ecosystem-offering-free-access-to-advanced-ai-18845/