TD Cowen reaffirmed a Buy rating and $655 price target on Microsoft (NASDAQ:MSFT), citing confidence in the company's expanding AI capabilities following announcements at its Ignite conference in San Francisco.

The analyst said Microsoft advanced its AI strategy with new product releases aimed at democratizing access to intelligence, embedding AI deeper into workplace functions, and addressing challenges tied to implementation and adoption. Notable additions included new Intelligence and Agent 365 control planes designed to anchor AI in enterprise data environments and offer monitoring tools for governance and ROI.

TD Cowen highlighted Microsoft's new partnership with Anthropic and said it believed the company maintained a leading position across multiple layers of the AI stack. The analyst added that Microsoft's integration across Microsoft 365 apps and its Fabric data platform, combined with native connections to partner data stores, positioned the company to deliver end-to-end infrastructure for AI agents. The firm also viewed Agent 365 and Foundry IQ as key tools to overcome organizational barriers such as security concerns, governance issues, and challenges measuring returns.