Microsoft (Nasdaq: MSFT) shares rose by 4.1% to $468.76 at 12:25 p.m. ET on Friday, following an adjusted price target of $600 set by Karl Kierstead, an analyst at UBS. This indicates a potential 28% increase for investors over the next year. The adjustment comes as UBS highlights upcoming growth catalysts in Microsoft Azure, particularly the new Fairwater AI data centers opening in Atlanta and Wisconsin.
Despite this optimism, Kierstead expressed concerns regarding the broader software sector’s devaluation and the sustainability of Microsoft’s elevated price-to-earnings ratio of 32. Analysts project a 14% long-term earnings growth for the company, which may not be sufficient given its high price-to-free cash flow ratio of 43. Recently, UBS also raised its fiscal Q2 2026 revenue guidance after a site visit to Wisconsin.
