3 Investor Takeaways From The Microsoft Build Conference

Microsoft Corporation MSFT held its annual Build developer conference this week, and one Wall Street analyst said Wednesday that he's bullish on the software company after attending the event.

The Analyst

Mizuho analyst Gregg Moskowitz reiterated a Buy rating on Microsoft with a $142 price target.

The Thesis

Moskowitz said there are three major Build takeaways for investors. (See his track record here.) 

First, 25 new updates and features for the Azure cloud platform highlighted just how powerful Azure is getting. Azure Kubernetes Service is the gold standard in compute service growth, Moskowitz said.

Microsoft also provided some hints at what its artificial intelligence-heavy next generation services will look like, the analyst said. The company will continue to deliver impressive Azure Premium services revenue numbers for years to come, he said. 

“While some additional deceleration is likely to occur over the next year or so, we firmly believe that investor concern about material deceleration is overblown, due in part to our checks that indicate high levels of demand, and given that longer-term contracts are becoming more common." 

Second, Moskowitz said Microsoft is branching out its cloud strategy to incorporate Office 365, LinkedIn, Dynamics 365 Online and GitHub. GitHub is growing at an especially strong clip, adding 8 million users in the past six months alone to surpass 36 million total users, he said. 

Finally, the analyst said Build made clear that Microsoft is ramping up its focus on security. CEO Satya Nadella told attendees that Microsoft is making privacy, cybersecurity and responsible AI top priorities.

Price Action

Microsoft shares were trading down slightly at $125.45 at the time of publication Wednesday. 

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Photo courtesy of Microsoft.