Analyst Ratings January 27, 2026

DA Davidson: Microsoft Valuation Lags Despite Azure Momentum

Analyst highlights faster Azure growth, mixed prospects across big tech and fresh analyst moves on Alphabet

By Maya Rios MSFT GOOGL META AAPL AMZN
DA Davidson: Microsoft Valuation Lags Despite Azure Momentum
MSFT GOOGL META AAPL AMZN

DA Davidson analyst Gil Luria says Microsoft’s Azure is outpacing Google Cloud Platform and Amazon Web Services in growth, but Microsoft shares trade near the low end of their historical multiple range, creating a potential valuation gap with peers. The firm also outlines expectations for Meta, Apple and Amazon, and notes a series of analyst target changes and regulatory developments affecting Alphabet.

Key Points

  • DA Davidson says Microsoft’s Azure is growing faster than Google Cloud Platform and Amazon Web Services, yet MSFT trades near the low end of its historical multiple range.
  • Meta is expected to sustain revenue growth above 20%, but investor reaction will depend more on updated operating expense and capital expenditure guidance than on top-line figures.
  • Analyst target increases for Alphabet from KeyBanc and Stifel contrast with Cantor Fitzgerald’s Neutral stance amid an EU antitrust review of Alphabet’s $32 billion Wiz acquisition.

DA Davidson analyst Gil Luria, in a recent "Mega (Cap) Preview" report, identified Microsoft’s Azure cloud unit as growing at a faster clip than both Google Cloud Platform and Amazon Web Services. Despite that operational strength, Luria highlighted a notable valuation observation: Microsoft (NASDAQ:MSFT) shares are trading toward the lower boundary of their historical multiple range, while Alphabet (NASDAQ:GOOGL) sits near the upper end of its own range. The contrast suggests a potential disconnect in how the market is pricing these large-cap cloud providers.

On social media and digital advertising leader Meta Platforms (NASDAQ:META), DA Davidson expects revenue growth to remain above 20 percent. The firm cautioned, however, that investor response to upcoming results will hinge more on updated guidance for operating expenses and capital expenditures than on headline revenue growth.

Apple (NASDAQ:AAPL) is forecast by DA Davidson to post a rare quarter of double-digit revenue growth, a performance the firm attributes to an iPhone upgrade cycle. The report also warned that this strength could create tougher year-over-year comparisons in subsequent quarters unless Apple introduces compelling new products, citing examples such as an enhanced Siri or a folding iPhone as potential catalysts absent which comparisons could prove difficult.

Amazon (NASDAQ:AMZN) is expected to deliver a strong report driven by both its consumer-facing businesses and its cloud operations. Luria specifically characterized the outlook as "a good quarter on both sides," pointing to a robust consumer fourth quarter and growing compute demand from Anthropic as contributors to increased cloud revenue.


The report also summarized recent analyst moves and developments related to Alphabet. KeyBanc raised its price target for Alphabet to $360 from $330 while keeping an Overweight rating, emphasizing the impact of artificial intelligence trends such as compute capabilities and proprietary data on Alphabet’s prospects. Stifel followed with a target hike to $346 from $333, citing expectations for strong advertising results in the fourth quarter, particularly for Search and YouTube.

Cantor Fitzgerald, by contrast, maintained a Neutral rating on Alphabet as regulators review the company’s proposed $32 billion acquisition of cloud security firm Wiz. The European Union has set a February 2026 deadline for a decision on that deal. The report also noted comments from Google DeepMind’s CEO on the company’s AI progress, highlighting significant breakthroughs and full-stack capabilities as factors that reinforce Alphabet’s focus on AI and cloud services.

Taken together, the DA Davidson preview presents a mixed but detailed picture across the largest technology names: clear operational momentum in Azure, continued revenue strength at Meta and Apple in the near term, robust contributions expected from Amazon’s consumer and cloud operations, and active analyst and regulatory developments shaping perceptions of Alphabet.

Risks

  • Valuation risk for Microsoft - despite Azure’s faster growth, MSFT’s lower-end multiple could limit near-term upside for investors seeking re-rating (impacts technology and cloud services sectors).
  • Guidance sensitivity at Meta - outcomes will depend heavily on updated operating expense and capital expenditure targets rather than revenue alone (impacts social media and advertising sectors).
  • Regulatory uncertainty for Alphabet - the EU has a February 2026 deadline for its review of the Wiz acquisition, which could affect Alphabet’s strategic plans and investor sentiment (impacts cloud security and cloud services markets).

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