Melius Research upgrades Microsoft to Buy with $665 price target on AI-security demand
What happened
Melius Research upgraded Microsoft (MSFT) to Buy from Hold on Monday and set a $665 price target. Analyst Ben Reitzes argued that heightened fears over AI safety risks and potential chaos from frontier models are driving enterprises toward Microsoft as the trusted 'adult in charge.' He wrote that businesses prefer Microsoft's secure wrappers, governance, and routing capabilities over relying directly on AI labs, and that growing AI demand could let Microsoft charge premium rates for its tools while expanding capacity — driving growth from both higher prices and increased volume. Shares rose 1.9% to $527.84, on pace for the highest close since October 29, 2025, and are up 9% in 2026. Of 59 analysts polled by FactSet, 98% rate the stock the equivalent of Buy.
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Start your free 14-day trialWho’s affected
- MSFT — upgraded to Buy, target implies roughly 26% upside from ~$528; enterprise AI-security/governance narrative supports Azure and Copilot monetization
- Cybersecurity names (indirect) — Melius argued AI-safety fears boost cyber vendors alongside Microsoft
Sources