11:14 AM EDT, 07/31/2025 (MT Newswires) -- Microsoft's ( MSFT ) fiscal Q4 earnings beat was driven by significant growth in the Azure segment and indicates a healthy cloud infrastructure market, UBS said in a Thursday research report.

Microsoft ( MSFT ) attributed the Azure upside to on-premises to Azure migration activity, strong demand from large enterprises, and robust usage of cloud and artificial intelligence applications on Azure, according to the note.

On AI demand, OpenAI remains a demand driver for Microsoft's ( MSFT ) graphics processing unit inference capacity while Oracle (ORCL), CoreWeave ( CRWV ) , and Alphabet's (GOOG/GOOGL) Google Cloud still require time to stand up incremental inference capacity, the analysts said.

The brokerage raised its fiscal year 2026 EPS guidance to $15.73 from $15.09 and modelled an all-in capex of $120 billion from $99.7 billion earlier.

UBS said it reiterated its buy rating on the stock and boosted its price target to $650 per share from $600.

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