Here’s the bull case for Microsoft

Murray Wealth Group senior portfolio manager Michael Hakes says Microsoft’s (Microsoft Stock Quote, Chart, News, Analysts, Financials NASDAQ:MSFT) bull case rests on three durable growth engines: Azure, enterprise software and AI monetization.

Speaking on BNN Bloomberg’s Market Call on July 3, Hakes said Microsoft’s key opportunity is converting its installed base into higher-value subscriptions and usage-based revenue while protecting margins and cash generation.

Azure remains the clearest growth driver, he said, as more enterprise customers standardize workloads on Microsoft’s cloud.

“Enterprises are standardizing more workloads on Microsoft’s cloud because it bundles infrastructure, security, identity, data tools and productivity software in one stack,” Hakes said.

The investor said that integrated offering is Microsoft’s key competitive advantage because it raises switching costs and supports pricing power.

Hakes said Copilot monetization remains an investor concern, particularly as generative AI competition grows. But he said Microsoft is already charging more for the product and customers, including Murray Wealth Group, are using it.

“They are monetizing,” he said. “We are using it. I find it very effective.”

Still, he said the risk is that Microsoft may not command the same pricing five years from now if competing AI tools pressure parts of its software suite, including Copilot, Excel and Word.

The stock was down 20.64% over the previous 12 months but up 37.06% over five years. Of the analysts covering the stock, 69 rated it “Buy,” three rated it “Hold” and one rated it “Sell,” with a consensus target of US$561.14.

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