Morgan Stanley attributes Microsoft’s “strong positioning against key secular growth trends,” combined with solid execution, for “another ~$1 billion revenue beat” with EPS 4% ahead of expectations. Commercial bookings and Azure both accelerating to 31% constant currency growth in Q3 “provide the clearest evidence yet of Microsoft’s leading position for AI driving direct revenues and increasing share of the broader IT budget,” says the analyst, who sees the company having “plenty of runway for growth” with the AI innovation cycle just starting. Morgan Stanley maintains an Overweight rating on Microsoft with a $520 price target on the shares.
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