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Microsoft’s (NASDAQ:) price target was lifted to $450 from $415 at Deutsche Bank and $430 from $390 at Stifel in notes on Friday, with both firms maintaining their Buy ratings on the stock.

Analysts at Deutsche Bank told investors in their F2Q preview note that they see an improving public clouds backdrop and growing generative AI tailwinds for the tech giant.

Microsoft will report its F2Q24 results after the close on January 30th. Analysts said the firm expects the results to come in toward the high-end of revenue guidance as Azure optimization activity eases relative to stable embedded expectations and Windows likely benefited from stabilizing PC demand during the holiday quarter.

“While the y/y impact of 1) accounting useful life changes, 2) depreciation of ramping AI-related CapEx, and 3) Activision amortization and integration costs are headwinds to profitability, we expect this to be more than offset by a lower OpEx baseline post the flow-through of last year’s cost actions and forecast healthy 42.5% operating margins and double-digit EPS growth (ex-last year’s 1x charge) at $2.75,” analysts wrote.

Meanwhile, analysts at Stifel stated that they expect solid Azure, Office 365, and margin results.

“We believe that Microsoft, with its increasingly unique set of AI-infused solutions, is well positioned to sustain strong revenue growth and healthy margins, as it takes share across its numerous operating segments,” analysts stated.

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