1 Wall Street Analyst Thinks Microsoft Stock Is Going to $465. Is It a Buy?

Solid quarterly results, high profitability, and significant involvement in artificial intelligence (AI) technology have powered Microsoft's (MSFT 0.04%) stock to all-time highs in 2024. That's saying something for a company that's been trading for decades.

If some analysts are to be believed, there's more growth in store, and one analyst recently reiterated his bullish take on the company. But is that view realistic?

A very secure investment, says prognosticator

In mid-May, Piper Sandler's Brent Bracelin published a new research note on Microsoft in which he justified his existing overweight (read: buy) recommendation and $465 per-share price target. Bracelin's update comes on the heels of meetings with executives in Microsoft's security unit. The analyst wrote that following these meetings, he realized the strength of this somewhat unheralded business for the company.

He characterized security as "an important growth vector," for the tech industry titan. According to his estimates, such offerings for Microsoft now comprise more than 10% of total sales, with around 1 million customers served.

"With the breadth of security portfolio across six unified families and vendor consolidation adoption drivers with up to 60% cost savings vs. point solutions, [Microsoft] appears well positioned to sustain growth in security," Bracelin wrote in his note.

One solid division among many

It says something about a company that such a large division with a large customer base is flying under the radar of many investors. "Security services" isn't a term most of us readily identify with Microsoft, but per Bracelin's reading, it's really finding its niche -- not an easy achievement, given the many security specialists fighting for share these days.

The Piper Sandler pundit's price target is only 11% above the current share price. Given that, and Microsoft's strengths in so many areas (productivity software, cloud computing, AI, etc.), I think that might be quite conservative. I feel there's much more mileage in this company's stock, and it could easily surpass $500 per share before long.