Bernstein is sticking with its Microsoft (NASDAQ:MSFT) rating while lifting its price target, arguing the company is taking a measured approach to capacity buildout despite strong demand signals.
The firm reiterated Microsoft at Outperform and raised its price target to $660 per share from $647, saying Microsoft is taking a "surprisingly measured approach" to building capacity given demand signals and its ability to pivot facilities to meet demand.
Bernstein wrote: "Simply stated Microsoft is not building too fast, but rather taking a surprisingly measured approach given the demand signals they are receiving and their ability to easily pivot facilities to meet demand," per CNBC.
Read Also: SpaceX Stock Meltdown Takes $28 Billion Bite Out of Google's Portfolio AI Capex Surges to New Heights This disciplined approach comes amid a broader surge in AI-related capital expenditures.
U.S. hyperscalers are projected to spend about $916 billion on AI capex over the next year, with expectations to reach nearly $1.2 trillion the following year.
