Microsoft rises 2% as Evercore hikes price target to $525 on AI growth

Microsoft shares rose about 2% on Wednesday following Evercore ISI's decision to raise its price target to $525 from $510, while maintaining an Outperform rating. The upgrade was driven by Evercore's conviction that artificial intelligence investments will support faster growth over the next several years. The brokerage expects Microsoft to deliver double-digit revenue and operating income growth in fiscal 2027, underpinned by accelerating demand for Azure cloud services and broader monetization of its Copilot AI product line. Despite this favorable long-term outlook, Evercore acknowledged that investor sentiment currently remains cautious.

A key element of Evercore's thesis concerns capital intensity. The firm projected Microsoft's fiscal 2027 cash capital expenditures at approximately $210 billion（約34兆円）, materially above the broader Wall Street estimate of roughly $180 billion（約29兆円）. Evercore attributed this elevated spending to the company's expectation that it will continue investing aggressively in AI infrastructure. However, the brokerage noted that capital spending growth could begin to normalize during 2027, suggesting a potential inflection point in the cost curve. Evercore identified three specific catalysts that could drive further upside: Azure growth in the second half of 2026, improving Copilot adoption rates, and easing concerns over capital expenditure trends. The firm added that if these factors materialize, they may help improve investor sentiment as Microsoft's AI strategy continues to unfold.

Evercore's price target increase reflects growing confidence in Microsoft's ability to monetize its substantial AI infrastructure investments. The firm's projection of about $210 billion（約34兆円） in fiscal 2027 capital expenditures—significantly above the Wall Street consensus of roughly $180 billion（約29兆円）—signals that Microsoft is willing to sustain elevated spending to maintain its competitive position in AI. This aggressive posture contrasts with what Evercore describes as cautious investor sentiment, suggesting a gap between near-term concerns about capital intensity and longer-term confidence in AI-driven growth. The brokerage specifically highlights Azure acceleration and Copilot adoption as near-term catalysts, indicating that visible momentum in these areas could help close that sentiment gap and validate Microsoft's investment thesis.