Goldman Sachs Just Added Microsoft to Its Closely Watched ‘Conviction List.' Broadcom and ServiceNow Were Removed.

Goldman Sachs added Microsoft to its U.S. Conviction List, reinforcing a bullish enterprise AI thesis centered on Azure growth and Copilot adoption. Goldman kept a $640 price target, well above the stock’s $487.65 price, citing Microsoft as a clean way to play the shift from AI training infrastructure to enterprise deployment. The article notes strong fiscal Q4 results: revenue rose 17.8% to $90.01 billion, non-GAAP EPS beat by 11.81%, Azure grew 43%, and Microsoft 365 Copilot reached 30 million paid seats. However, the stock has already rallied 26.5% over five trading sessions and trades at a rich 25.89 trailing P/E, while FY2026 capex jumped 79.6% to $115.95 billion and free cash flow fell 6.5%. Goldman removed Broadcom, ServiceNow, and Johnson & Johnson from the list, while adding Applied Materials and Delta Air Lines. Near-term upside remains constructive, but valuation, heavy capex, and crowded positioning raise execution risk.