Microsoft (MSFT) Named Top Large-Cap Software Pick by Morgan Stanley

Microsoft Corporation (NASDAQ:MSFT) ranks among the best AI stocks to buy according to analysts. On December 17, Morgan Stanley retained Microsoft Corporation (NASDAQ:MSFT) as its top pick in large-cap software, citing sustained demand across its divisions and strong prospects for operating margin growth. Analyst Keith Weiss maintained a Buy rating and a $650 price target for the company’s shares.

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Meetings with Microsoft Corporation (NASDAQ:MSFT) executives, according to Weiss, left the firm “with conviction on robust demand translating to durable mid-teens top-line growth and increased confidence in ROI contributing to continued operating margin expansion.”

According to Morgan Stanley, Azure AI’s gross margins, which do not include OpenAI’s revenue share, may currently be around 20%. By FY29, these may rise to 30% and potentially surpass 40%, suggesting “very significant levels of upside to our model in the coming years.”

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