BNP Paribas delivers blunt message on Microsoft stock

BNP Paribas delivered a measured outlook on Microsoft (MSFT.OQ), saying fundamentals remain intact despite a rough 2026 start. The bank flagged a near-term drag from the “SaaS Smash” and heavy AI-related capex — including an estimate that ~1/3 of new AI capacity was used internally — but identified three catalysts for a rebound: renewed Copilot traction, consistent Azure revenue beats, and moderation in capex growth as partner capacity is leveraged. Microsoft’s latest quarterly results showed $81.3B revenue (+17% YoY) and 38% Azure growth. Wall Street price targets vary widely (average ~$579.57, ~34.7% upside). The note implies a mixed market impact: downside pressure may persist while medium-term upside remains if AI monetization and capex moderation materialize.