TLDR
- Wedbush analyst Daniel Ives calls the revised OpenAI-Microsoft deal a “net positive” for MSFT
- OpenAI will pay Microsoft ~$6 billion this year, up from the ~$4 billion previously projected
- Microsoft locks in IP rights to OpenAI models through 2032 and keeps its equity stake
- TD Cowen reiterates a Buy rating with a $540 price target, citing Azure growth acceleration
- MSFT currently trades at $409.43, down 15% year-to-date, with a Strong Buy consensus on the Street
Microsoft and OpenAI have renegotiated the terms of their partnership, and Wall Street is taking notice.
OpenAI agreed to cap total revenue-sharing payments to Microsoft at $38 billion through 2030. That replaces a previous structure that could have resulted in far larger cumulative payments over time.
The revised deal also lets OpenAI distribute its models through other cloud providers — including AWS, Google Cloud, and Oracle — reducing Microsoft’s exclusivity edge.
Wedbush says Wall Street is still underestimating Microsoft’s AI growth story.
The firm kept its Outperform rating on $MSFT, calling it one of its favorite large-cap AI plays for 2026. 🔥 pic.twitter.com/kEQrtTtmK9
— Trader Edge (@Pro_Trader_Edge) May 15, 2026
Wedbush analyst Daniel Ives called the restructured deal “a net positive” for Microsoft. He raised his price target on MSFT to $575, implying around 42% upside from current levels, and kept his Outperform rating.
The stock currently trades at $409.43, down 15% year-to-date.
What Microsoft Gets Out of the Deal
The key shift is timing. Microsoft will now receive roughly $6 billion from OpenAI this year, compared to the $4 billion previously expected. That’s because the new structure removes OpenAI’s option to defer some payments until 2032.
Microsoft also locked in IP rights to OpenAI’s models and products through 2032, regardless of when artificial general intelligence is officially declared. That removes what Ives described as an “open-ended risk” from the prior arrangement.
On top of that, Microsoft will no longer have to share revenue with OpenAI on Azure sales of OpenAI models to cloud customers. Ives called this the removal of a “meaningful drag” on Azure’s ability to monetize AI.
Microsoft retains its equity position in OpenAI, keeping it exposed to any upside ahead of a potential IPO.
“Microsoft is reducing its dependency on a single highly concentrated commercial arrangement while maintaining strategic alignment with OpenAI,” Ives said.
Azure Growth in Focus
Separately, TD Cowen reiterated its Buy rating on MSFT with a $540 price target following virtual investor meetings with Microsoft’s investor relations team.
The firm noted Microsoft expects to remain capacity-constrained through at least the end of 2026. But efficiency gains have freed up more compute availability, and the company is directing more of that capacity toward Azure workloads.
Microsoft flagged that Azure growth is expected to accelerate in the second half of 2026. Ramping its Fairwater data center capacity faster has helped, as has a $30 billion commitment to build capacity for Anthropic — signed in November 2025 — which will become a new AI workload driver beyond OpenAI.
Copilot adoption also picked up last quarter. Microsoft expects more net subscriber additions in the June quarter than the roughly 5 million added in March. New drivers include the E7 bundle, now generally available, and Copilot Cowork, which is not yet live.
For GitHub Copilot, Microsoft introduced per-user-plus-consumption pricing to boost monetization of its growing agentic usage.
On the broader Street, MSFT holds 32 Buy ratings and 2 Holds, giving it a Strong Buy consensus. The average 12-month price target sits at $559.98, implying around 37% upside from current levels.
LinkedIn, owned by Microsoft, is also preparing to cut approximately 5% of its workforce as part of a reorganization, according to Reuters.
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