Major Bank Ratings｜Bank of America: AI momentum drives Microsoft’s solid quarterly performance, reiterates “Buy” rating

Glonghui, May 9 – Bank of America Securities released a report stating that AI momentum drove Microsoft’s solid quarterly performance. Key highlights for the quarter include Azure revenue growth surpassing expectations, reaching 39% at constant currency compared to the market expectation of 38.2%; resilience shown in non-AI core business operations, and a significant upward revision of capital expenditure guidance, indicating that AI investment is expected to remain high in the foreseeable future. Overall, total revenue increased by 15% year-on-year, and earnings per share reached $4.27, both above market expectations of 13.3% and $4.04, respectively. In addition, the company disclosed that its annualized AI recurring revenue reached $37 billion, a year-on-year increase of 123%. The bank reiterated its “Buy” rating on Microsoft with a target price maintained at $500.