Citigroup has reiterated its optimistic outlook on Microsoft's (MSFT, Financial) fiscal fourth quarter 2025 performance, which ended in June. The firm predicts that most key metrics will exceed expectations by 1 to 2 percentage points. Azure AI usage is anticipated to show slight growth. Based on Citigroup's research and distributor data, overall growth and quota attainment for the quarter reached a four-year high, highlighting strong momentum in Copilot and Dynamics products.
Citigroup has raised its forecast for Azure AI, expecting approximately 36% growth in the first quarter of the next fiscal year, remaining stable or slightly declining sequentially. The target price for Microsoft's shares has been increased from $605 to $613, with potential for further upside. Considering Microsoft's strategic AI positioning, business model quality, and long-term pricing and profit potential, Citigroup maintains Microsoft as a top pick with a "buy" rating.
