TD Cowen Keeps Buy Rating on Microsoft (MSFT) Ahead of Q1 Report

Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Best Dow Stocks to Buy According to Wall Street Analysts. On October 24, TD Cowen reaffirmed its Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a price target of $640.

This decision comes ahead of the company’s first-quarter earnings report for its fiscal year 2026, which is scheduled for October 29. TD Cowen’s research shows that activity in Azure data centers has increased over the past month, which indicates strong demand for AI and potential medium-term growth for Microsoft Corporation’s (NASDAQ:MSFT) cloud business.

For FY26 Q1, TD Cowen expects Intelligent Cloud revenue to grow by 25% in constant currency, slightly higher than the Street’s estimate of 24.5% growth. The firm projects Productivity and Business Processes to see growth of 12%, higher than the Street’s consensus of 11%.

TD Cowen models Azure growth at 37% in constant currency, which aligns with the Street’s estimates. The firm suggests that Azure growth could possibly beat expectations by 2% or more.

The research firm expects Microsoft Corporation (NASDAQ:MSFT) to achieve revenue of $80.9 billion for FY2026 Q1 and EPS of $3.83. These are both higher than the Street’s estimates of $80.1 billion in revenue and $3.80 in EPS.

Microsoft Corporation (NASDAQ:MSFT) is an American technology company that develops and markets software, services, and hardware. The company also specializes in AI-powered cloud, productivity, and business solutions.

While we acknowledge the potential of MSFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best American AI Stocks to Buy According to Analysts and 11 Dirt Cheap Stocks to Buy According to Analysts.

Disclosure: None. This article is originally published at Insider Monkey.