Microsoft Corp. (MSFT) Melius Research Downgraded to Hold

Microsoft Corp. (MSFT)

Analyst Update

Melius Research set a 12 month price target on Microsoft’s stock of $430.00 per share, while simultaneously downgrading the stock to “Hold” from “Buy”, signaling a more balanced risk-reward outlook at current valuation levels.

Melius noted that Microsoft’s fundamentals remain strong, supported by durable growth across Azure, Office, and enterprise software, as well as the company’s leadership position in artificial intelligence through its partnership with OpenAI. AI-driven demand continues to underpin cloud workloads and long-term revenue visibility, reinforcing confidence in Microsoft’s strategic positioning within the global software and infrastructure market.

However, the downgrade reflects valuation considerations rather than operational concerns. With shares trading around $412, Melius believes much of the near- to medium-term upside is already priced in following the stock’s strong performance. The firm highlighted rising capital expenditures tied to AI infrastructure and data centers as a factor that could temper margin expansion in the near term, even as it supports longer-term growth.

Overall, the Hold rating suggests Melius views Microsoft as a high-quality, structurally advantaged company, but one where incremental upside may be more limited from current levels. The $430 target implies modest appreciation potential, indicating expectations for continued solid execution but fewer catalysts for outsized near-term gains.