Truist joins the ranks of Microsoft Corporation (MSFT.US): AI "hoe and shovel" investment is a great choice.

After Microsoft Corporation (MSFT.US) announced its first-quarter performance for the 2026 fiscal year, Truist Securities analyst Terry Tillman reiterated his "buy" rating and a target price of $675. The company believes that Microsoft Corporation is an excellent investment choice with financial flexibility in the "hoes and shovels" category. Truist is optimistic about Microsoft Corporation's Azure cloud platform and commercial order growth momentum, noting that demand trends are accelerating in various end markets and product areas. The "hoes and shovels" strategy involves investing in companies that support an industry with foundational technology, tools, or services, rather than directly investing in the final products of that industry. This allows investors to indirectly participate in an industry without bearing the risks of direct investment in final products. It believes that Microsoft Corporation is "one of the most outstanding artificial intelligence enterprises with growth potential and profitability performance," and has a strong balance sheet flexibility. Therefore, it recommends investors to buy its stock during the current market weakness. Truist stated, "Regarding further thoughts on the 2026 first-quarter report and communication with the company's management: After the announcement of the first-quarter performance for the 2026 fiscal year and communication with the company's investor relations department, we provided more updated information on several themes, including accelerating demand growth, capital expenditure, collaboration with OpenAI, the impact of models based on the latest agreements, and brief macro commentary. We reiterate our buy rating and recommend buying at the current slight decline. Based on the trend of accelerating demand growth in various end markets and product areas, we are more confident in the sustained momentum of Azure and commercial bookings. We believe this is one of the best comprehensive artificial intelligence choices for sustainable profitability, with significant balance sheet flexibility, which is our view." In addition, Morgan Stanley has also reiterated its "overweight" rating for Microsoft Corporation, raising its target price from $625 to $650. Likewise, JPMorgan also reiterated its "overweight" rating and slightly raised its target price from $565 to $575. Bank of America reaffirmed its "buy" rating as well as a target price of $640. Meanwhile, Wedbush has also joined the bullish camp, believing that Microsoft Corporation will be the next company to join NVIDIA Corporation in the $5 trillion market value club. Wedbush reiterated its "outperform the market" rating and a target price of $625.