Citi Maintains a Buy on Microsoft Corporation (MSFT)

​Microsoft Corporation (NASDAQ:MSFT) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 30, Tyler Radke from Citi reiterated a Buy rating on the stock but lowered the price target from $660 to $540. Earlier, on January 29, Karl Keirstead from UBS also reiterated a Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a $600 price target.

​The ratings follow the company’s fiscal Q2 2026 earnings release announced on January 28. The company grew its quarterly revenue by 16.72% year-over-year to $81.27 billion and topped the estimates by $993.68 million. Moreover, the EPS of $4.14 also topped the consensus by $0.22.

​Revenue growth was driven by a 10% increase in Productivity and Business Processes and a 21% year-over-year increase in Intelligent Cloud revenue. UBS noted that despite the impressive results, the share price traded downwards after the release, mainly due to the 38% growth in Azure cloud services, which was expected to meet the 39% growth target.

UBS explained that Microsoft Corporation (NASDAQ:MSFT) made a strategic choice of prioritizing scarce GPU capacity for its own first-party products over Azure cloud services. The firm believes that this allocation difference can be one of the reasons the company slightly missed the estimates.

​Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.

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: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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