BNP Paribas analyst Stefan Slowinski said Microsoft Corp (NASDAQ:MSFT) is gaining momentum across its AI strategy as Copilot adoption improves, Azure growth accelerates, and concerns around OpenAI ease.



Slowinski maintained an Outperform-equivalent &#34;(+)&#34; rating with a $555 price forecast, implying 33% upside from Microsoft's May 22 closing price of $418.60.



<h2>Slowinski Says Copilot Adoption Is Improving</h2>



Slowinski said Microsoft is now delivering on key AI priorities after investors previously questioned Copilot adoption while rivals such as Anthropic scaled rapidly.



He noted that Microsoft has started rolling out features like Agent Mode more broadly after earlier delays tied to enterprise deployment cycles and gradual general-availability launches.



He said Microsoft can now leverage its distribution advantage across its massive Microsoft 365 installed base as Copilot capabilities become more accessible to enterprise users.



<h2>BNP Paribas Sees Stronger Copilot Usage Trends</h2>



Slowinski said Copilot user sentiment has improved significantly, while engagement trends across Excel, PowerPoint, and Word continue rising.



He added that Microsoft recently highlighted stronger month-over-month engagement and retention metrics.



BNP Paribas projects Copilot seats could exceed 25 million by the end of fiscal 2026, up by more than 10 million over the past two quarters.



Slowinski also said that preview products such as Copilot Cowork are receiving positive feedback, arguing that Microsoft is responding effectively to competitive AI pressure, similarly to Alphabet's Gemini push.



<h2>Azure Expansion Supports Growth Outlook</h2>



Slowinski said BNP Paribas continues modeling Azure growth above 40% over the next several quarters as Microsoft expands AI infrastructure capacity.



He said the recently launched Fairwater Wisconsin facility and the near-full-scale deployment of Fairwater Atlanta should help accelerate Azure revenue growth through calendar 2026.



<h2>Analyst Says OpenAI Risks Have Eased</h2>



Slowinski said Microsoft's relationship with OpenAI has become increasingly de-risked following updates to their agreement that removed concerns about AGI.



He also pointed to OpenAI's reported $122 billion funding round, which he said should help OpenAI meet more than $250 billion in Azure commitments.



In addition, Slowinski said OpenAI's recent court victory could potentially pave the way for a near-term IPO.



Microsoft develops and licenses consumer and enterprise software, best known for Windows and the Office productivity suite. Its business spans three major segments: productivity and business processes, intelligent cloud, and more personal computing.



That mix matters because Microsoft tends to trade as both a &#34;core software compounder&#34; and a cloud/AI infrastructure proxy, making it sensitive to shifts in big-cap tech leadership.



When the sector is rallying, but Microsoft is lagging, it often signals that investors are becoming more selective about where they want exposure in mega-cap tech.



<h2>Earnings &amp; Analyst Outlook</h2>



Looking further out, the next major catalyst for the stock arrives with the July 29, 2026 (estimated) earnings report.



<ul>
<li>EPS Estimate: $4.23 (Up from $3.65 YoY)</li>



<li>Revenue Estimate: $87.61 Billion (Up from $76.44 Billion YoY)</li>



<li>Valuation: P/E of 24.9x (Suggests fair valuation relative to peers)</li>
</ul>



Analyst Consensus &amp; Recent Actions: The stock carries a Buy rating with an average price target of $559.38. Recent analyst moves include:



<ul>
<li>Wedbush: Outperform (Maintains Target to $575.00) (May 13)</li>



<li>Tigress Financial: Buy (Raises Target to $680.00) (May 6)</li>



<li>Stifel: Hold (Raises Target to $415.00) (May 1)</li>
</ul>



<h2>Price Action</h2>



MSFT Stock Price Activity: Microsoft shares were down 0.85% at $416.95 at the time of publication on Tuesday, according to Benzinga Pro data.



Photo: Shutterstock

MSFT

DTCR

BNP Paribas analyst Stefan Slowinski projects Microsoft (MSFT) to exceed 25 million paid Copilot seats by fiscal 2026, with Azure growth expected above 40%. He maintains an Outperform rating and a $555 price target, indicating a 33% upside. Improved Copilot adoption and engagement metrics, alongside a de-risked relationship with OpenAI, bolster Microsoft's AI strategy. The stock is currently priced at $416.95, with a consensus Buy rating and an average target of $559.38.

- BNP Paribas analyst Stefan Slowinski highlights Microsoft's gains in AI strategy, driven by improving Copilot adoption and accelerated Azure growth.  
- He maintains an Outperform-equivalent rating with a $555 price forecast, citing an expected increase in Copilot users to over 25 million by fiscal 2026.  
- The firm's projections indicate Azure growth exceeding 40%, supported by recent infrastructure expansions and a de-risked relationship with OpenAI.

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Microsoft's AI Momentum Builds: Analyst Sees Copilot Seats Topping 25 Million, Azure Growth Above 40%