Baird Starts Microsoft at Outperform, Citing Big AI Momentum

Microsoft MSFT just picked up a big vote of confidence from Baird, which kicked off coverage by slapping an Outperform rating on the stock plus a $600 price target. In plain English: they think Microsoft is still one of the safest, strongest ways to play the AI wave.

Baird's view is pretty straightforward. Microsoft isn't just another company building AI tools it's one of the few actually shaping the entire ecosystem. Its partnership with OpenAI, its massive Azure footprint, and its dominance across business software all combine into one huge advantage.

Now yes, the company is spending like crazy on AI (capex jumping from $88 billion to $143 billion in a year is wild). But even with that, analysts still think Microsoft will churn out around $74 billion in free cash flow next year. That's the sort of financial muscle most companies can only dream of.

Azure continues to prove why Microsoft stays ahead. Cloud revenue soared 40% last quarter, which helped cement Baird's view that Microsoft has a long runway and plenty of room to keep growing.

Baird sees Microsoft as a long-term AI core holding.They're betting Microsoft stays one of the defining winners of the AI era.