Microsoft: Azure Should Make A Comeback Thanks To AI

Summary:

  • Microsoft’s Q4 performance exceeded analyst estimates with strong revenue and EPS growth, projecting double-digit growth for FY25.
  • AI spending is necessary for Microsoft as it drives revenue growth across various segments, with a steady uptrend in AI contribution.
  • Google’s regulatory challenges in the search business create an opening for Microsoft’s Bing, with potential for market share gains and revenue growth.

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Investment Thesis

Microsoft (NASDAQ:MSFT) released its fourth-quarter results last week. In this article, I am initiating coverage of the company by analyzing its latest earnings report and investigating the setback seen in Azure’s growth along with

Forward P/E Multiple Approach

Price Target

$444

Projected Forward P/E Multiple

30x

Projected FY25 EPS

$13.1

Projected Earnings Growth

13.04%

Projected FY25 EPS

$14.81


Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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