Major Bank Ratings | Citi: Lowers Microsoft Target Price to $660, Slightly Reduces 2026 Non-Azure Business Estimates + Increased OpenAI-Related Spending

Glonghui, January 22｜Citi issued a report maintaining a constructive view on Microsoft (MSFT.US), expecting Azure’s business to accelerate growth in the second half of fiscal 2026. However, due to weak demand for personal computers leading to a slight downward revision of non-Azure business estimates for 2026, along with increased expenses related to OpenAI, the company’s target price was lowered from $690 to $660, with a “Buy” rating maintained. The report noted that distributor surveys showed Microsoft’s quarterly results had slightly declined, but partner surveys and CIO survey results were more optimistic, indicating Azure continues to maintain momentum and has a strong order pipeline. Although second fiscal quarter results may be mixed, the bank is optimistic about Microsoft’s performance in the second half of the year, as strong orders and expanded capacity are expected to drive Azure’s accelerated growth and trigger upward forecast revisions. Microsoft remains the top pick among mega-cap tech stocks, as its diversified and high-return-on-investment AI monetization paths are expected to drive continued acceleration in revenue and profit growth.