Microsoft (MSFT) reported "solid" fiscal Q3 results, with its cloud platform Azure posting growth above estimates, RBC Capital Markets said in a note emailed Thursday.
RBC highlighted Microsoft's profitability and revenue for the quarter that were also above consensus, indicating a "strong start" to H2.
Revenue contributions from Azure's AI Services also continued to increase in the quarter adding 16 points to growth, RBC said.
"All in, the quarter is a step in the right direction," analysts said in the note. "We believe Microsoft's significant AI leadership is being underappreciated by investors."
The investment firm raised its price target to $525 from $500, while keeping its outperform rating on the stock.
Shares of Microsoft were up about 9% in recent trading Thursday.
Price: 430.64, Change: +35.38, Percent Change: +8.95
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