ChainCatcher report: In its latest research report, Deutsche Bank stated that concerns over Microsoft's surging capital expenditures, AI return on investment, and concentration of orders from OpenAI have been significantly overblown, and the current valuation is attractive; the bank maintains a "Buy" rating and a $550 price target. Deutsche Bank expects Microsoft's fourth fiscal quarter (corresponding to the second calendar quarter) revenue to reach $87.4 billion, a 14.3% year-over-year increase, and non-GAAP earnings per share of $4.17. Azure revenue growth, at constant exchange rates, is projected to reach 40% to 41%, supported by continued enterprise cloud migration, rising AI computing demand, and new data center capacity. Microsoft 365 Commercial Cloud revenue is expected to grow 15% to 16%, with paid Copilot seats potentially exceeding 25 million by year-end.
Deutsche Bank: Microsoft's AI Concerns Are Overblown, Azure Growth Could Reach 41%
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Summary
Deutsche Bank says on-chain analysis shows concerns over Microsoft’s AI spending are exaggerated. The bank maintains a 'Buy' rating with a $550 price target. It forecasts Q4 revenue at $87.4 billion, up 14.3% year-over-year, with non-GAAP EPS at $4.17. Azure growth could reach 40-41%, driven by cloud migration and AI demand. Microsoft 365 commercial cloud revenue is expected to increase by 15-16%. Copilot paid seats may exceed 25 million by year-end.
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