In a note covering infrastructure and AI Software, Cantor Fitzgerald analyst Thomas Blakey raised the price targets for:

Microsoft Corp (NASDAQ:MSFT) – from $522 to $608, while maintaining an Overweight rating.

ServiceNow Inc (NYSE:NOW) – from $141 to $174, while reiterating an Overweight rating.

Software as a group has declined by 1.4% year-to-date, versus an 11.4% gain in the S&P500 and NASDAQ rising 13.6%, respectively, while the PHLX Semiconductor Sector Index (NASDAQ:SOX) has been the best-performing tech index up 65.7%, analyst Blakey noted.

Check out other analyst stock ratings.

Microsoft: The analyst highlighted the following initiatives:

  • Partnered with Marvell Technology Inc (NASDAQ:MRVL) and privately-held Utimaco to launch Azure Payment HSM v2, a managed cloud payment-security platform.
  • Published a provisional AI Code of Conduct setting model behavior standards, emphasizing human autonomy, and warning against user dependency or sycophancy.

Microsoft recently reorganized its business segments, shifting slower-growth industry solutions like Healthcare out of Azure and moving higher-growth businesses, such as GitHub Cloud and Security, into Microsoft 365 Cloud, Blakey said.

Azure’s underlying growth is accelerating, supported by faster capacity rollouts and hardware/software efficiency gains, the analyst stated. Despite operational improvements, overall demand continues to outpace available infrastructure capacity, he further noted.

ServiceNow: "We expect the uptick in agentic AI to drive modernizations and security demand higher, favoring infrastructure and security software in general and specifically platform plays in our coverage," Blakey wrote.

Investor sentiment on ServiceNow has turned positive, driven by strong AI-driven tier upgrades and growing demand for security-focused agentic platforms, the analyst stated.

Despite stock pressure from revenue adjustments, steady organic growth of between 18%-20.5%) and strong US Federal performance position the company well to meet its expanding AI targets, he added.

MSFT, NOW Price Action: Shares of Microsoft had risen by 0.08% to $494.2, while ServiceNow’s stock by 1.71% to $137.45 at the time of publication on Monday.

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