Microsoft (MSFT) Stock: The Azure Price Hike Story Wall Street Is Watching Closely

TLDR

• BNP Paribas analyst Stefan Slowinski kept his Buy rating and $549 price target on MSFT after meeting with Microsoft executives
• Azure growth has already reached the mid-40% range, driven by efficiency gains and added computing capacity, not price hikes
• Microsoft is raising Azure prices, but increases only apply to existing customers when their contracts renew
• Microsoft confirmed its revenue-sharing deal with OpenAI has a cap, previously reported at $38 billion, and said OpenAI is not behind Azure’s recent growth
• Wall Street has a Strong Buy consensus on MSFT with an average price target of $569.94, implying roughly 14% upside

---

Microsoft is quietly setting up another growth lever for Azure, and Wall Street is taking notice.

BNP Paribas analyst Stefan Slowinski met with Microsoft executives and came away with a clearer picture of what is driving Azure’s momentum. He kept his Buy rating and $549 price target on MSFT.

Microsoft Corporation, MSFT

Azure growth has already hit the mid-40% range. What is interesting is that this acceleration has come mostly from better efficiency and more available computing capacity, not from price increases.

Microsoft confirmed to BNP that it is raising Azure prices. The catch is that existing customers stay on their current contract terms until renewal. That means higher pricing will feed into revenue gradually, not all at once.

That is actually a more sustainable setup than a sudden price shock. As contracts roll over, the revenue bump from pricing will layer on top of growth that is already happening from greater usage and expanded infrastructure.

Azure Capacity Still a Constraint

Capacity remains a real issue. Microsoft pushed back on a recent report that it plans to scale data center capacity to 38 gigawatts by 2032, but the company did not offer its own number.

That gap has sparked speculation about whether Microsoft could source computing power from SpaceX. The idea picked up steam after Nebius CEO Arkadiy Volozh hinted at a possible partnership, and SpaceX recently revealed a new computing customer expected to spend around $1 billion per month starting in December.

Microsoft did not confirm any SpaceX deal. But executives told BNP the company is actively hunting for more computing power because demand is still outpacing what it can currently supply.

OpenAI Revenue Sharing Has a Cap

Microsoft also gave BNP more detail on its OpenAI relationship. The revenue-sharing agreement has a cap, with a prior report putting that figure at $38 billion.

Crucially, Microsoft said OpenAI revenue sharing is not what is driving Azure’s recent growth acceleration. The company added that it will break out OpenAI’s contribution if it ever becomes large enough to materially move the needle on Azure results.

That level of transparency is a useful signal for investors trying to understand how much of Azure’s strength is structural versus tied to one partner.

Microsoft stock is currently trading around $501.61, up roughly 1.6% on the day.

On the analyst front, RBC Capital has an Outperform rating and a $640 price target on MSFT. Citizens reiterated a Market Outperform rating with a $550 target.

Across the past three months, 33 analysts rate MSFT a Buy versus just two Holds, giving the stock a Strong Buy consensus. The average price target sits at $569.94, suggesting around 14% upside from current levels.