Oppenheimer is changing the firm’s estimates for Microsoft’s Azure revenue and CAPX by lowering Azure revenue, and putting CapEx spending around $2B below the Street the next few years after being well above the last year. The firm believes the uptake of Copilots is slightly below expectations for Microsoft and AI buildouts are also a bottleneck. Microsoft changed how revenue is reported to better align it with how the business is managed, but has not provided historical proforma estimates yet, which will make for a messy quarter, Oppenheimer argues. The firm has an Outperform rating on the shares with a price target of $500.
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