‘Time to Act,’ Says Morgan Stanley About Microsoft Stock

Microsoft (NASDAQ:MSFT) has spent the past two years writing some of the biggest checks in the tech industry as it builds out the infrastructure needed to support the AI revolution.

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While investors have closely tracked the company’s soaring capital expenditures, a new deep dive from Morgan Stanley analyst Keith Weiss suggests the market may not fully appreciate what those investments could ultimately be worth.

After analyzing Microsoft’s datacenter expansion and comparing cloud revenue growth to capacity additions, Weiss came away “bullish on upside potential,” arguing that expectations for the revenue those investments can generate may still have room to move higher. The analyst believes Microsoft is building AI capacity ahead of demand, creating the potential for cloud revenue forecasts to rise as monetization catches up.

Using a “revenue per megawatt” framework to evaluate datacenter productivity, Weiss estimates…