Jefferies analysts argue Microsoft stock offers compelling value after a sharp pullback. The company’s $250 billion commitment from OpenAI and $30 billion from Anthropic underscores strong AI-driven demand. Its shares now trade at 23x CY27 EPS, below peers despite better growth visibility.

The firm highlights record backlog growth and expects Microsoft’s second-quarter remaining performance obligations to surge. Azure’s revenue has beaten guidance for three consecutive quarters, with cloud momentum accelerating as data-center capacity doubles over the next two years.

Jefferies maintains a Buy rating and $675 price target. Analysts believe AI monetization through Copilot and first-party tools will sustain high-teens revenue growth. While capital intensity remains a concern, execution on supply expansion could drive upside into FY26.

Investors should watch how quickly Microsoft converts AI deals into recurring revenue. With Azure making up 30% of sales, any acceleration boosts overall growth trajectory meaningfully.