Broker Name: iFAST Financial Pte Ltd
Date of Report: 07 Jul 2026
Excerpt from iFAST report:
Report Summary
- Stock: Microsoft Corp (NASDAQ: MSFT)
- Action: BUY recommendation reaffirmed
- Target Price: USD560 by 2028
- Key Idea: The market is undervaluing Microsoft due to concerns over heavy AI-related capital expenditure (CAPEX) and near-term margin pressure. iFAST argues these are temporary, as Microsoft is strategically prioritising building its own proprietary AI ecosystem over maximising short-term Azure revenue. This approach is expected to unlock long-term growth and profitability as AI investments mature.
- Highlights:
- Microsoft’s balance sheet remains strong, with Net Debt-to-EBITDA ratio expected to stay close to zero.
- Azure expected to sustain ~39% revenue growth in 2026, with operating margins stabilising around 45%.
- Microsoft’s AI models and Copilot applications are showing increasing adoption and revenue contribution.
- Stock trades at a 30% discount to historical forward P/E, presenting a structural buying opportunity.
- Implications: Investors are currently penalising Microsoft for long-term strategic investment, creating an opportunity to buy a high-quality company undergoing a strategic transition. The report forecasts earnings growth of 13% and 17% over the next two years, supporting the BUY call and target price.
above is an excerpt from a report by iFAST Financial Pte Ltd. Clients of iFAST Financial Pte Ltd can be the first to access the full report from the iFAST website : https://secure.fundsupermart.com/fsmone/policies/328125/investment-account-terms-&-conditions
