Morgan Stanley "Clears Mines" for Microsoft Corporation (MSFT.US): Three major growth concerns are not a concern, reiterates "hold" rating.

Morgan Stanley released a research report, listing software giant Microsoft Corporation (MSFT.US) as its preferred stock in the software sector. The target price for the stock has been raised from $582 to $625, and the "hold" rating is maintained. Analyst Keith Weiss mentioned in the report, "The evolution of the relationship between Microsoft Corporation and OpenAI, the sustainability of growth in the Azure cloud business, and the business health of productivity applications in the context of intelligent agents have been putting pressure on Microsoft Corporation's stock price. However, we believe that Microsoft Corporation has found a way to alleviate these pressures and the growth drivers are increasing, hence we have upgraded it to our preferred stock." Weiss further explained that despite concerns from investors about the cooperation between Microsoft Corporation and OpenAI, OpenAI seeking partnerships with other parties (such as the recent $30 billion partnership agreement with Oracle Corporation) is not negative for Microsoft Corporation. According to Weiss, the signing of this partnership agreement should be seen as a positive signal for Microsoft Corporation. From Microsoft Corporation's perspective, in the current environment of limited resources, its core goal is to maximize revenue. Therefore, Microsoft Corporation is likely to allocate more GPU resources and limited capacity of data center architecture to enterprise customers. Additionally, there are concerns that with OpenAI turning to other partners, the growth of Azure may slow down, but Weiss clarified that this is not the case because the business scope of Azure goes far beyond generative artificial intelligence. He added, "Our calculation of Azure AI business revenue through capital expenditure shows that there is significant space for Azure's performance to exceed our expectations. In our capital expenditure model, the implicit contribution scale of Azure AI business is calculated based on the capital expenditure allocated to artificial intelligence-related projects." Recent research data also shows that Microsoft Corporation's productivity applications have a "sustainable" advantage in terms of user mindset and market share, and its ability to continuously optimize products has been validated multiple times. In conclusion, Weiss stated, "Overall, we understand the concerns in the market, but we believe that existing data and research results support the view that Microsoft Corporation's growth is sustainable. Double-digit growth rates, operating cost control capabilities, stock buyback plans, and dividend yields together contribute to Microsoft Corporation's higher double-digit sustainable total return level, which is not yet fully reflected in the current stock price."