Jefferies predicts 41% upside for Microsoft stock

Investment bank Jefferies has reaffirmed its buy rating for Microsoft, calling it a good investment opportunity. Despite a challenging start to 2025, Microsoft's stock has fallen 7%, which is more than the S&P 500's 2.1% decline. Analyst Brent Thill from Jefferies noted that recent declines in Microsoft's stock price make it an attractive option for investors. He believes the stock could rise more than 40%, targeting a price of $550 in the next year. Thill is optimistic about Microsoft's cloud service, Azure, competing effectively against Amazon Web Services thanks to advances in artificial intelligence. Thill also highlighted the strong performance of Microsoft’s 365 Commercial Cloud. He mentioned that even as Microsoft invests heavily in AI, its profit margins are expected to grow. Current margins are in the mid-40s, which are much higher than those of other large companies. Other analysts share this positive outlook. Goldman Sachs also maintains a buy rating for Microsoft, with a price target of $500. They commend Microsoft's strong investment strategy under CEO Satya Nadella.