TradingKey – Rothschild & Co Redburn, after updating its valuation model, raised Microsoft’s (MSFT) price target from $400 to $440, while continuing to maintain its “Neutral” rating.

The price target increase stems primarily from a valuation recovery in the Software-as-a-Service (SaaS) sector, rather than Redburn significantly raising its earnings growth expectations for Microsoft. The higher price target alongside an unchanged rating reflects the firm’s recognition of Microsoft’s competitiveness in cloud computing and enterprise software, while suggesting that the current valuation already prices in much of the growth potential from its AI business.