Morgan Stanley released a report on May 27 arguing Wall Street underestimates Microsoft’s future AI revenue. The firm notes Microsoft is expanding data center capacity faster than current revenue projections suggest.
Analyst Keith Weiss forecasts the company’s data center footprint will grow from 5 gigawatts in fiscal 2024 to 20 gigawatts by fiscal 2028. This quadrupling of capacity signals significant future earnings not yet reflected in the stock price.
The expansion points to substantial revenue upside despite an expected decline in revenue per megawatt. Morgan Stanley maintained an Overweight rating on Microsoft shares. The firm set a price target of $650.