BlockBeats News, August 12th, Bernstein stated in its latest research report that it remains bullish on Microsoft, raising the 12-month target price to around $660 and maintaining an "Outperform" rating. The firm believes that the market's concerns about Microsoft's AI infrastructure being "built too quickly and spending too much" are somewhat overblown, as the company's data center expansion still aligns with the growth in commercial cloud revenue, and AI investment will continue to benefit Azure, Copilot, and the enterprise software ecosystem.

Microsoft's stock price has significantly recovered recently, rising about 30% since the strong earnings report at the end of July, returning to positive territory for the year. Bernstein believes that despite the stock price rebound, Microsoft's valuation is still below its previous high range, and AI and the cloud business will continue to support profit growth.

The report specifically mentioned that Microsoft's long-term lease obligations amount to $329.1 billion, but these commitments are spread from the fiscal year 2027 to the fiscal year 2033, with some contracts extending up to 20 years; hardware commitments in the 2027 fiscal year are around $169 billion and will decrease significantly thereafter. This means that Microsoft is not locked into a single short-term AI hardware spending cycle and can still reallocate data center resources for traditional cloud and software services in the future.