Investment bank Morgan Stanley on Friday elevated Microsoft stock to its "top pick" in the software sector.
Analyst Keith Weiss reiterated his overweight, or buy, rating on Microsoft and raised his price target to 625 from 582.
In a client note, Weiss said he elevated Microsoft to a top pick status based on the company's "broadening set of growth drivers."
He also believes the software giant will be able to shed concerns about its evolving relationship with OpenAI, the durability of its Azure cloud computing business and the health of its productivity apps business.
"Net, we understand concerns, but think the data and survey-work supports a view underpinning durability of growth," Weiss said. "Double-digit growth plus opex (operating expenses) discipline plus share repurchases plus dividend yield a durable high-teens total return profile, underpriced at current levels."
On the stock market today, Microsoft stock rose 0.9% to close at 511.46.
Microsoft stock is trading beneath its 50-day moving average line within an eight-week flat base, according to IBD MarketSurge charts. That base has an official buy point of 555.45, based on IBD trading principles.
Further, Microsoft stock is on two IBD lists: Long-Term Leaders and Tech Leaders.
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