--- title: "Microsoft Stock Slips Despite Strong Azure Growth: Analysts Debate AI Spending" type: "News" locale: "en" url: "https://longbridge.com/en/news/303607197.md" description: "Microsoft shares declined 1.22% despite strong Azure growth, with analysts debating AI infrastructure spending. BNP Paribas raised its price target to $632 on 48% Azure growth, while other analysts highlighted robust cloud performance and free cash flow advantages. However, concerns persist regarding the sustainability of software growth, capacity constraints, and the impact of high capital expenditures on future free cash flow." datetime: "2026-10-29T17:01:48.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/303607197.md) - [en](https://longbridge.com/en/news/303607197.md) - [zh-HK](https://longbridge.com/zh-HK/news/303607197.md) generator: "portal-rs" --- # Microsoft Stock Slips Despite Strong Azure Growth: Analysts Debate AI Spending **Microsoft Corp.** (NASDAQ:MSFT) remains in focus after stronger-than-expected quarterly results and guidance reinforced confidence in Azure and enterprise software growth, while analysts continue to debate the scale and returns of its AI infrastructure spending. **• Microsoft shares are experiencing downward pressure. Why are MSFT shares declining?** ## **Slowinski Raises Target On Azure Acceleration** **BNP Paribas** analyst **Stefan Slowinski** maintained an Outperform rating on Microsoft and raised his price forecast to $632 from $604, citing stronger Azure growth and better visibility into revenue acceleration. Slowinski said Microsoft’s fiscal first-quarter results showed AI-driven growth at scale, with Azure revenue rising 48% in constant currency, above company guidance of 44%-45% and roughly 47% buy-side expectations. Microsoft 365 Commercial Cloud grew 18% in constant currency. He said Microsoft’s fiscal second-quarter outlook points to further acceleration, with Azure growth expected at 49%-50% and Microsoft 365 Commercial Cloud growth at 19% in constant currency. Slowinski raised his fiscal 2027 revenue estimate by about 0.5%, driven by higher Azure growth assumptions. He also increased his fiscal 2028 and fiscal 2029 cash capex estimates by 9% and 16%, respectively, while slightly lowering EPS estimates to reflect higher assumed debt. The analyst expects Microsoft to remain free-cash-flow positive in the first half of fiscal 2027, but said free cash flow could turn negative in the second half and remain limited in fiscal 2028 if the current capex trajectory continues. ## **Luria Sees Strong AI Funding Capacity** Ahead of the results, **D.A. Davidson** Managing Director **Gil Luria** slightly favored Microsoft over Alphabet and Amazon. Luria expected Azure growth to accelerate and viewed Microsoft’s strong free cash flow as an advantage in funding AI infrastructure without necessarily relying on additional debt or equity. **See More: Top Value Stocks** ## **Thill Highlights Azure and M365 Strength** Following the results, **Jefferies** analyst **Brent Thill** pointed to accelerating Azure and Microsoft 365 growth, strong remaining performance obligations and lower-than-expected capital spending as supportive of his outlook. Thill said Microsoft’s next challenge is balancing continued AI infrastructure investment with growth and profitability. He also highlighted resilient operating margins and the early stage of enterprise AI adoption. ## **Munster Questions Software Growth Durability** **Deepwater Asset Management’s Gene Munster** said Microsoft’s software growth accelerated to 17% in September from 14% in June. However, Munster questioned whether that pace is sustainable as AI changes demand for knowledge-work software. He also said capacity constraints limited Azure’s potential growth, reinforcing the need for continued infrastructure investment. **MSFT Price Action:** Microsoft shares were down 1.22% at $524.52 at the time of publication on Thursday, according to Benzinga Pro data. *Photo via Shutterstock* **Read Also: Alphabet’s $514 Billion Google Cloud Backlog, AI Spending Put 2027 Growth in Focus, Says Analyst** ### Related Stocks - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [MSFC.US](https://longbridge.com/en/quote/MSFC.US.md) - [MSFD.US](https://longbridge.com/en/quote/MSFD.US.md) - [MSFL.US](https://longbridge.com/en/quote/MSFL.US.md) - [MSFO.US](https://longbridge.com/en/quote/MSFO.US.md) - [MSFU.US](https://longbridge.com/en/quote/MSFU.US.md) - [MSFW.US](https://longbridge.com/en/quote/MSFW.US.md) - [MSFX.US](https://longbridge.com/en/quote/MSFX.US.md) - [MSFY.US](https://longbridge.com/en/quote/MSFY.US.md) ## Related News & Research - [Microsoft Earnings Expose a Growing Divide in the Magnificent 7 AI Trade](https://longbridge.com/en/news/303771913.md) - [Microsoft's cloud growth, cash flow offer respite from AI spending fears](https://longbridge.com/en/news/303461196.md) - [MSFT Stock Eyes Best Day In Over 3 Months After Earnings Beat — Gene Munster Says 'Software Is Alive And Well, At Least For Now'](https://longbridge.com/en/news/303527987.md) - [Microsoft reveals strong cloud growth amid financial reporting overhaul](https://longbridge.com/en/news/303450879.md) - [OceanIQ Capital LLC Purchases 17,018 Shares of Microsoft Corporation $MSFT](https://longbridge.com/en/news/303708260.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**