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- Microsoft (NASDAQ:MSFT) was in focus on Wednesday as Citi added a 90-day positive catalyst watch to the tech giant.
- Shares were down fractionally in premarket trading.
- “MSFT remains our top pick in software given its relative defensiveness in a choppy macro environment, AI product cycle and our reinforced conviction that Street estimates on Azure may be too low for FY26,” Citi analyst Tyler Radke wrote in a note to clients.
- Radke, who upped his price target on Microsoft to $605 from $540, said a detailed capex return on investment analysis supports a “base case” of high-30% growth for Azure and a possible growth of 40% or more. He now expects Azure growth to rise 36.1% year-over-year in constant currency in fiscal 2026, well above the consensus estimate of 32.1%.
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