Morgan Stanley Discusses Microsoft (MSFT) AI Revenue Outlook

Microsoft Corporation (NASDAQ:MSFT) is one of the 12 Stocks Most Bought by Hedge Funds in Q1 2026. On May 27, Morgan Stanley, in a note to clients, discussed whether Wall Street is fully valuing the scale of future AI revenues at Microsoft Corporation (NASDAQ:MSFT) and whether investors are underestimating how much monetization the company’s fast-growing AI infrastructure can support.

Analyst Keith Weiss pointed out that “GenAI demand well ahead of supply has yielded swiftly ramping Capex forecasts” for Microsoft Corporation (NASDAQ:MSFT).

Morgan Stanley Discusses Microsoft (MSFT) AI Revenue Outlook

Microsoft Headquarters

However, Morgan Stanley noted that revenue expectations have not increased at the same pace. According to the bank, its “Monetization per Megawatt and Capex-Implied Azure forecasts suggest revenues estimates may be inappropriately lagging, leaving room for upward revisions.”

Weiss also said that Morgan Stanley’s analysis of hyperscaler spending and Microsoft Corporation’s (NASDAQ:MSFT) data center growth indicates significant upside. He wrote that the firm’s analysis “suggests Microsoft is deploying AI datacenter capacity well ahead of near-term monetization.” He added that the market may not have fully recognized the potential scale of the future revenue.

Microsoft Corporation (NASDAQ:MSFT) is an American technology company that specializes in AI-powered cloud, productivity, and business solutions. The company develops and markets software, services, and hardware.

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