12:41 PM EDT, 07/26/2024 (MT Newswires) -- Microsoft ( MSFT ) holds a strong position in the artificial intelligence infrastructure market with a promising growth trajectory for Azure backed by significant contributions from AI and non-AI sectors, UBS Securities said in an earnings preview emailed Friday.

CoreWeave's revenue and backlog growth, coupled with OpenAI's substantial investment in Azure makes these growth estimates seem attainable and reinforces investor confidence, according to the firm.

UBS said it is raising fiscal 2025 capex estimates to $73 billion from $68 billion to underscore Microsoft's ( MSFT ) commitment to expanding its AI and cloud capabilities.

The firm said Office 365's growth may be tempered by slower seat expansion, but the potential impact of Copilot could "offer an upside surprise" by December.

Microsoft's ( MSFT ) stock is down 10% since early July despite typically bullish sentiments as hedge funds are adopting a neutral or short stance due to minimal perceived upside, UBS added.

The firm reiterated its buy rating on Microsoft's ( MSFT ) stock and kept the price target at $520.

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