Microsoft Corp (NASDAQ: MSFT) and Alphabet Inc (NASDAQ: GOOGL) have sharply rallied in the trailing twelve months but a Morgan Stanley analyst is convinced both still have significant room to the upside.

Keith Weiss raised his price target on Microsoft stock this morning to $465 that translates to a near 15% upside from here.

His bullish call arrives a day after $MSFT reported better-than-expected results for its second financial quarter (read more). According to the Morgan Stanley analyst:

Microsoft is now calling for a 28% annualised growth in Azure in the current quarter. It expects a 1.0% to 2.0% increase in operating margin this year despite higher spending on cloud and artificial intelligence infrastructure.

Keith Weiss also reiterated his “overweight” rating on Google stock today. His new $165 price objective suggests a 15% upside in shares of the search giant as well.

The Nasdaq-listed firm reported its best quarter for revenue growth since early 2022 last night.

The Morgan Stanley analyst particularly cheered strength in the company’s “efficiency workstreams” in his research note on Wednesday that helped improve its EBIT/FCF “even with higher capex”.

More importantly, Sundar Pichai – the chief executive of Alphabet Inc said in the earnings release last night that the “best is yet to come” on the AI front as Invezz reported here.