MSFT
A quieter kind of upside
Microsoft is telling Wall Street that Azure pricing is inching higher, but the benefit won’t hit like a jump scare. New pricing kicks in when contracts renew, so the lift should show up gradually instead of all at once. In other words: less confetti cannon, more slow-burn espresso drip.
BNP Paribas Equity Research’s Stefan Slowinski kept a positive view on Microsoft and slapped a $549 price target on the stock, which implies roughly 11% upside from the Sept. 18 close. He pointed to a big theme investors keep circling: GPU rental pricing. Microsoft says pricing is improving, but recent Azure strength has been driven mainly by more capacity and better efficiency, not pricing magic.
The AI hunger games
That’s the bigger story here. Microsoft is still hunting for more compute capacity because demand is running hotter than supply, and it won’t even offer a neat little target for how much capacity it expects to have by 2032. Translation: the company still sees enough AI appetite to keep building, even if the infrastructure hunt is messy and expensive.
A few other nuggets mattered too:
- Microsoft confirmed there’s a cumulative cap on its OpenAI revenue-sharing deal, though it didn’t disclose the amount.
- The company said OpenAI revenue sharing hasn’t been a meaningful driver of Azure’s recent outperformance.
- Microsoft also reiterated its expectation that Microsoft 365 growth should accelerate through fiscal 2027.
Why investors should care
This is the kind of story that matters because it hints at where the next leg of cloud growth could come from. If Azure pricing and AI demand keep compounding, Microsoft doesn’t need one giant catalyst — it can stack a bunch of medium-sized wins and still look pretty formidable.
Big picture: Microsoft’s Azure story isn’t just about “more GPUs.” It’s also about pricing power, capacity discipline, and whether the AI boom keeps giving the company extra lanes to grow.