Microsoft Corporation (NASDAQ:MSFT) is one of the AI stocks on the market radar. On January 20, TD Cowen lowered its price target on the stock to $625 from $655 and maintained a Buy rating. The price target cut comes ahead of Microsoft’s second-quarter results, with the company pointing to capacity constraints as a limiting factor to accelerating growth.
The company previewed its results, saying that testing suggests demand for GPU and CPU infrastructure is stable or strengthening. He anticipates about 2 points of upside on his Azure estimates of 37% cc.
TD Cowen also suspects that the lack of acceleration in growth, primarily stemming from capacity constraints, will keep shares range-bound in the near term. However, it is still constructive for the company’s position to serve AI workloads.
We suspect a lack of growth acceleration due to capacity constraints will keep shares within the NT range, but we remain constructive on MSFT’s position to serve AI workloads and see acceleration potential in 2HCY26. Reiterate Purchase. Pacific Time at $625.
Microsoft reports earnings on January 28. TD Cowen believes Microsoft is primed for AI growth with a possible reacceleration in the second half of 2026.
Microsoft Corporation (NASDAQ:MSFT) delivers AI-powered enterprise, productivity, and cloud solutions, focusing on efficiency, security, and AI advancements.
While we recognize MSFT’s potential as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.
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