Azure acceleration is in sight, Microsoft Corporation (MSFT.US) continues to advance its AI layout, and Wall Street suggests buying on dips.

Microsoft Corporation (MSFT.US) achieved a year-on-year revenue growth of over 18% for the second consecutive quarter. Analysts pointed out that the company's continued expansion of artificial intelligence capabilities is becoming a signal of accelerated growth for Azure. Following the announcement of the financial results for the first quarter of the 2026 fiscal year, almost all major financial institutions reaffirmed their "hold" or "buy" ratings for the company, and viewed any pullback as a buying opportunity. Morgan Stanley reiterated a "hold" rating for Microsoft Corporation and raised the target price from $625 to $650. The Morgan Stanley analyst Keith Weiss team wrote in an investor report on Thursday, "Commercial bookings increased by 111% year-on-year, RPO grew by 51%, highlighting strong demand; Azure's fixed exchange rate growth was 39%, higher than the company's guidance of 37%, but slightly below the market's expectation of 40%. However, in a supply-constricted environment, being preoccupied with Azure's growth rate being only 1 percentage point below seems to miss the point - growth is accelerating. We will actively buy on dips." Microsoft Corporation CFO Amy Hood said in the earnings conference call, "Azure AI service revenue roughly met expectations, even as we continue to deploy more capacity this quarter, the demand for workloads still exceeds supply." J.P. Morgan also reiterated a "hold" rating and slightly raised the target price from $565 to $575. Analysts at J.P. Morgan, led by Mark Murphy, said in a report on Thursday, "Our sense is that some investors may be overly optimistic, originally expecting Azure's high growth rate to continue, and may have predicted Q1 Azure's fixed exchange rate growth to be 40-41%, and/or believed that the lower year-over-year base in FQ2 may pave the way for stronger Azure guidance." "Even if there are some short-term fluctuations that may disappoint some investors, the long-term prospects seem intact; we appreciate Microsoft Corporation's emphasis on resource substitutability, disciplined execution, and thoughtful business decisions, which we believe are reflected in its operating profit increase of 23% year-on-year," he added. In addition, the renewal of the partnership agreement between Microsoft Corporation and OpenAI also helps quell speculation about their relationship. Bank of America Corp analyst Brad Sills said in a report, "The previously announced OpenAI partnership renewal essentially resolves this dispute, with the agreement including a $25 billion commitment to Azure and continued exclusive AI collaboration, once again confirming Microsoft Corporation's core position in AI development and commercialization." Bank of America reaffirmed its "top pick" buy rating and $640 target price. Sills said, "Our conclusion is that even with supply chain constraints, Azure's growth rate remains steady in the 30% range. With the new OpenAI agreement set to take effect as early as the second quarter of the 2026 fiscal year, and supply chain constraints easing in the 2027 fiscal year, we see a path for Azure's growth rate to accelerate again." Meanwhile, Wedbush also joined the bullish camp, believing that Microsoft Corporation will be the next company to join NVIDIA Corporation's $5 trillion market cap club. Wedbush reiterated an "outperform the market" rating and a $625 target price. Wedbush analyst Daniel Ives team said in an investor report, "The Nadella team once again delivered a solid quarter, positioning the company to enter the $5 trillion club within the next 18 months. The AI revolution is still in its early stages, and Microsoft Corporation is entering the next phase of commercializing AI. We believe that any knee-jerk decline represents a strong buying opportunity." As of the time of writing, Microsoft Corporation was up 0.49% in pre-market trading on Friday.