Morgan Stanley analyst Keith Weiss says Microsoft may be underestimated for AI data-center payoff, maintaining Overweight rating with $650 price target implying 52% upside

Weiss estimated Microsoft's cloud ecosystem generates about $20 million to $30 million in annualized revenue per megawatt, with that figure likely slipping into the high teens by fiscal 2028.

Microsoft's installed data-center footprint could expand from roughly 5 gigawatts in fiscal 2024 to about 20 gigawatts by fiscal 2028, with monetization opportunities extending beyond Azure to include Microsoft 365, Dynamics 365, LinkedIn, and GitHub.

Weiss argued that lower revenue per megawatt should not be read as a sign of weaker monetization, and that Microsoft appears to be adding AI capacity ahead of demand rather than after it.