Microsoft Q2 - We Rate At Accumulate - Price Target $470 - Stop Below $386

Microsoft (MSFT) Q2 demonstrated robust fundamentals with 18% TTM revenue growth and strong 26% UFCF margins, despite rising capex. MSFT’s rapidly expanding order book (RPO +84% YoY, >2x TTM revenue) reduces risk of near-term revenue misses. We rate MSFT at Accumulate within the $386–430 range, with a technical price target of $470 and a stop-loss below $386. We believe valuation to be neither cheap nor expensive; and that technicals and institutional accumulation support further upside, with potential for $490 before meaningful weakness.