Microsoft Upgraded to 'Buy' as AI Demand Surges

Key Takeaways

• <ul><li>Melius Research upgraded Microsoft to Buy with a $665 price target, citing rising AI security demand</li><li>Wells Fargo raised its Microsoft target to $725 and added the stock to its Q4 Tactical Ideas list</li><li>Scotiabank lifted its Microsoft target to $615 from $510 while maintaining an Outperform rating</li><li>DeepSeek has narrowed the AI performance gap with US models to just 3 percent on benchmarks</li><li>AI tools were suspected in cyberattacks on South Korean banks, exposing data on thousands of customers</li><li>Cognizant launched Activate unit targeting companies earning $1 billion to $5 billion in revenue</li><li>Microsoft Azure and cloud revenue grew 43% year over year in the fiscal fourth quarter</li><li>ARKG ETF gained 24.8% over three months as AI and biotech stocks surged</li><li>Moderna-Merck mRNA cancer vaccine met key Phase 3 trial results, boosting healthcare stocks</li><li>Melius introduced a fiscal 2029 EPS estimate of $30.77 for Microsoft</li></ul>

Melius upgrades Microsoft to Buy with $665 target on AI security demand

Melius Research upgraded Microsoft to Buy from Hold and set a $665 price target. Analyst Ben Reitzes cited rising enterprise demand for AI security and governance solutions. He noted Microsoft shares have risen about 40% from a June low of $353 and now trade near a 52-week high of $553.72. Melius expects Azure to grow more than 50% by the fourth quarter of fiscal 2027.

Melius upgrades Microsoft stock rating on AI security demand

Melius upgraded Microsoft to Buy from Hold and set a price target of $665. Analyst Ben Reitzes said the stock has risen about 40% from its June low of $353 and currently trades near its 52-week high of $553.72. The firm raised fiscal 2027 earnings estimates by 2% and fiscal 2028 by 4%. It also started a fiscal 2029 estimate of $30.77 per share. Melius expects Azure to grow over 50% by the fourth quarter of fiscal 2027.

Analyst upgrades Microsoft stock as AI fears create security opportunity

Melius analyst Ben Reitzes upgraded Microsoft to Buy from Hold and raised his price target to $665. He believes companies are growing cautious about how they deploy AI models and agents. This creates demand for trusted platforms that can control model access and add security layers. Melius raised fiscal 2027 EPS estimates by about 2% and fiscal 2028 by roughly 4%. It also introduced a fiscal 2029 EPS estimate of $30.77. Microsoft is set to report fiscal first-quarter 2027 earnings on October 27.

Melius gives Microsoft bullish call saying AI fears may help leaders

Melius Research analyst Ben Reitzes upgraded Microsoft to Buy from Hold with a $665 price target. The firm said AI risk concerns could make Microsoft and cybersecurity companies more important. Scotiabank raised its Microsoft price target to $615 from $510 and kept an Outperform rating. Wells Fargo raised its target to $725 from $700 and added Microsoft to its Q4 Tactical Ideas list. Microsoft reported Azure and cloud revenue grew 43% year over year in the fiscal fourth quarter.

Microsoft stock upgraded to Buy as firm seen as leader in AI trust

Melius Research analyst Ben Reitzes upgraded Microsoft to Buy from Hold and raised his price target to $665 from $465. The upgrade came because Microsoft is viewed as a leader in trustworthy AI practices. On the day of the report, Microsoft shares rose 1.5% to close at $525.18. The firm sees Microsoft as well positioned to benefit from enterprise demand for secure AI systems.

Melius upgrades Microsoft to Buy with $665 target on AI security demand

Melius Research upgraded Microsoft to Buy from Hold with a $665 price target. Analyst Ben Reitzes said companies want trusted platforms for AI security and governance. He believes Microsoft's leadership under CEO Satya Nadella positions it well. Enterprise customers are willing to pay more for protection against AI risks.

Longtime Microsoft skeptic analyst flips bullish on AI pivot

Analyst Ben Reitzes of Melius Research upgraded Microsoft to Buy from Hold. He raised his price target to $665 from $465. He said Microsoft's experienced leadership will be rewarded in the AI era. He believes fear of AI risks will drive demand to platforms that can best protect against them.

AI tools suspected in cyberattack on South Korea's Shinhan Bank

Advanced AI tools may have been used in a cyberattack on South Korea's Shinhan Bank. The attack exposed information on about 25,000 customers. Attackers likely used AI agents to find vulnerabilities. South Korea's Financial Supervisory Service began an emergency inspection. Other banks in South Korea also reported recent breaches.

South Korea probes bank breaches amid suspected AI-powered attacks

South Korea's Financial Services Commission held an emergency meeting after cyberattacks on banks. Shinhan Bank leaked details of 25,000 customers. KB Kookmin Bank leaked information of 119,000 clients. Hana Bank also reported a limited breach. Authorities instructed banks to inspect IT systems and share threat information quickly.

Genentech AI leader Richard Bonneau leaves pharma company

Genentech, a unit of Roche, parted ways with its global head of AI for drug discovery, Richard Bonneau. This marks a latest high-profile departure at the pharma company. The news was reported by Endpoints News. No further details about the reason for the exit were provided.

DeepSeek closes AI performance gap with US to just 3 percent

A Bloomberg Intelligence analysis shows Chinese AI models now trail US models by only 3 percent on benchmark scores. The gap shrank from 9 percent in May and 15 percent earlier this year. DeepSeek V4.1 Flash launched in September and ranked sixth worldwide on LiveBench. Only three of the 15 top ranked models on LiveBench are Chinese. The progress raises doubts about whether US technological dominance in AI will hold.

AI and biotech stocks surge as healthcare ETFs post strong gains

The US-listed ETF ARKG, focused on innovative technologies like gene therapy, gained 24.8 percent over three months and 83.5 percent since the start of the year. AI-related stocks rose sharply after a dip in late June. Healthcare ETFs like XLV and VHT, which include Johnson and Johnson, AbbVie, Merck, Amgen, and Eli Lilly, hit new highs. A Moderna and Merck mRNA cancer vaccine met key Phase 3 trial results, causing shares to jump. Positive clinical results from Amgen also boosted investor confidence.

Companies need better scoreboards to measure AI success

Many companies are adopting AI but focus too much on whether the technology is smart enough. A better question is whether AI actually improved business outcomes like revenue or quality. Examples include optimizing salespeople for better retention and improving factory throughput while reducing defects. The author argues that businesses must track clear metrics to understand AI's real impact.

Magnificent 7 may face a major AI surprise by 2028

Alphabet recently reported strong cloud growth while its stock barely moved. This development could signal a bigger shift for the Magnificent 7 group. Analysts suggest that AI developments may bring unexpected surprises for these major tech companies by 2028. The situation highlights how quickly the AI landscape is changing.

Study finds LLM judges rank AI outputs but fail to measure real acceptance

A new study called O*NET-BENCH tested 33 LLM judge configurations across six model families. While judges often agreed on ranking AI responses, their estimates of acceptance rates varied wildly from 3.0 to 97.9 percent compared to 61.1 percent for actual workers. The study found that ranking agreement alone is not enough for measuring AI in workplaces. Researchers say judges must be validated against the actual acceptance rates they claim to measure.

Cognizant launches Activate unit for mid-sized AI transformation

Cognizant launched Cognizant Activate, a new business unit focused on helping emerging enterprises adopt AI. The unit targets companies earning $1 billion to $5 billion in annual revenue across financial services, healthcare, manufacturing and retail. It will offer pre-configured solution kits covering data and AI, cybersecurity, enterprise applications, cloud modernization and managed services. A single engagement lead will manage each client from the first conversation through delivery. The unit draws on Cognizant's AI Builder capability and ecosystem partnerships.

AI tackles paperwork bottleneck in trade finance

AI is being used to speed up document review in trade finance, one of the most manual parts of the process. PYMNTS Intelligence found that 70% of CFOs use AI for cash flow management and enterprises have automated 55% of accounts receivable on average. Smart Checking software extracts data, interprets transaction-specific terms and runs documentary credit checks using AI models. Confidence scores determine whether a transaction moves forward or goes to a trade specialist. Faster processing matters because 43% of US small businesses with international suppliers prioritize faster settlement.

Sources

• Melius Upgrades Microsoft to Buy With $665 Target on AI Security Demand
• Melius upgrades Microsoft stock rating on AI security demand
• Analyst Drops Massive Take on Microsoft Stock Over AI's Biggest Fear
• MSFT Gets A Bullish Call From Melius — Analyst Says AI Fears Could Benefit Leaders Like Microsoft
• Microsoft Seen As 'Adults In Charge' Of AI. Stock Upgraded To Buy.
• Melius Lifts Microsoft to Buy, Sees AI Security Spending Driving Shares Toward $665
• Wall Street rewards Microsoft's AI pivot. A longtime skeptic says it's just the beginning
• AI tools flagged in cyberattack on S. Korea’s Shinhan Bank
• South Korea probes bank breaches amid suspected AI-powered attacks
• Exclusive: Genentech AI leader Richard Bonneau leaves pharma in latest exit
• DeepSeek narrows AI gap with US rivals to just 3%, threatening American dominance
• While artificial intelligence (AI) and semiconductor-related stocks, which led the global stock mark..
• Your company’s AI needs a scoreboard
• This Could Be the Magnificent 7's Biggest AI Surprise by 2028
• Right Order, Wrong Scale: Auditing LLM Judges for Occupational AI Measurement
• One lead will guide Cognizant's AI work for $1B-to-$5B companies, from first conversation through delivery.
• AI Targets Trade Finance’s Paperwork Bottleneck