Microsoft price target lowered to $540 from $610 at TD Cowen

TD Cowen analyst Derrick Wood cut his Microsoft (MSFT.OQ) price target to $540 from $610 while keeping a Buy rating, flagging limited near-term Azure upside as GPU capacity is prioritized for internal R&D tied to frontier model development. The note previews Q3 and expects steady growth with only a modest unlock in M365. The lower target and cautious tone signal tempered analyst expectations for MSFT’s cloud revenue acceleration, which could weigh on sentiment despite the maintained Buy, but the firm still sees enough conviction for an upside case over the longer term.