According to BNP Paribas, the 'SpaceX–Google Cloud deal' sends a critically important positive market signal: supply constraints for AI computing infrastructure remain extremely tight, particularly as pricing power for cloud-based AI inference is shifting toward cloud platforms that possess large-scale, dispatchable computing resources.
BNP Paribas recently published a research report stating that SpaceX and Alphabet's $Alphabet-C (GOOG.US)$ recently concluded a major AI cloud computing infrastructure deal—under which Google will pay SpaceX $920 million per month for AI computing infrastructure—could demonstrate to global investors that another leading U.S. cloud provider, $Microsoft (MSFT.US)$ Microsoft’s Azure cloud computing division still has significant upside potential.
According to BNP Paribas (referred to as “BNP”), the “SpaceX–Google cloud computing deal” conveys a critically positive market signal: supply of AI computing infrastructure remains extremely tight, particularly with pricing power for cloud-based AI inference increasingly tilting toward cloud platforms that possess large-scale, dispatchable computing resources.
To Wall Street analysts who remain bullish on the broader trend of a global “AI super bull market” driven by the AI computing boom, the AI super bull market cycle is far from over. SpaceX appears more like a beneficiary and amplifier of this rally rather than the feared “capital-draining” terminator that some market participants worry about.
BNP Paribas issues an upbeat research note on Microsoft: stock price headed toward USD 555
In a client report, senior BNP Paribas analyst Stefan Slowinski wrote: “While we acknowledge these agreements are intended as short-term contracts executed in an environment of extreme supply constraints, they nonetheless further confirm that demand for AI computing infrastructure remains robust.” He added, “We believe that if contract renewals come with stronger pricing, this could create upside potential for Microsoft Azure’s growth outlook, potentially lifting its growth rate into the mid-40% range.”
Other issues Slowinski is monitoring include whether Microsoft can sustain the efficiency gains derived from its scalable Azure cloud computing resource pool—gains that have consistently driven the segment’s growth above investor expectations over recent quarters—and whether this strong outperformance is sustainable.
He is also considering whether Microsoft can raise prices on long-term Azure contracts as AI-related computing infrastructure agreements approach renewal—a point that is particularly noteworthy given the ongoing “silicon inflation effect” tied to AI across key supply chain bottlenecks, including memory/storage chips and data center CPUs.
BNP Paribas analyst Slowinski maintains a “Buy” rating on Microsoft shares, with a target price of USD 555. As of Tuesday’s U.S. market close, Microsoft’s stock stood at USD 403.41, implying a highly optimistic 12-month price outlook according to BNP Paribas.
Beyond the increasingly positive outlook for cloud computing deals, Slowinski noted early signs of improving user feedback for Microsoft’s Copilot AI, both among consumer (C-end) and enterprise (B-end) users. Given that Copilot has trailed behind OpenAI’s ChatGPT, Anthropic’s Claude, and Google’s Gemini AI application platform, any improvement warrants close investor attention.
Slowinski explained: “We are seeing early indications of improved Copilot user feedback, especially among users with Frontier access.” He added, “However, many of these newer features are not immediately rolled out broadly to the entire installed user base, and enterprise deployment cycles can be relatively slow.”
On the eve of SpaceX's record-breaking IPO, is Microsoft entering a window for revaluation?
If SpaceX’s IPO successfully amplifies the bullish market narrative around 'space-based AI data center construction plus long-term scarcity of AI computing resources,' capital is likely to flow back into established cloud leaders like Microsoft—companies that already possess massive cloud infrastructure and have mature enterprise client ecosystems, AI model ecosystems, and proven capabilities in compute resource orchestration.
On Tuesday, Eastern Time, media outlets citing sources familiar with the matter reported that SpaceX has attracted over $250 billion in investor subscription demand—far exceeding the company’s planned $75 billion fundraising target for what would be the largest initial public offering (IPO) in history. If SpaceX’s share price continues to rise due to index-driven buying and limited tradable float, it could attract even more capital chasing the stock, further reinforcing its valuation expansion trend.
The $250 billion subscription figure itself indicates that global risk capital remains highly enthusiastic about AI computing infrastructure, commercial space ventures, and next-generation AI infrastructure assets centered on space-based data centers. If markets were truly on the brink of liquidity exhaustion, such nearly fourfold oversubscription would be unlikely. On the contrary, this suggests that substantial pools of long-term capital—including sovereign wealth funds, pension funds, growth-oriented funds, and active hedge funds—are proactively seeking core assets capable of anchoring the next decade’s growth narrative.
According to the latest mainstream views on Wall Street, despite recent sharp pullbacks in shares across the global AI computing supply chain—including ARM, Micron, SK Hynix, and Samsung—there is no prevailing bearish consensus that the 'AI super-cycle bull market' has ended. Instead, a contrasting trend has emerged: an increasing number of major investment institutions are raising their year-end targets for benchmark equity indices, with nearly all citing the ongoing wave of AI-related capital expenditures, robust progress in AI infrastructure build-out, and AI-driven earnings expansion as key drivers, while emphasizing that the current downturn represents a healthy correction.
Fundamentally, Microsoft’s valuation is no longer supported solely by AI hype; rather, the AI-driven growth trajectory of its Azure cloud platform is rapidly materializing. In Q3 of fiscal year 2026, Microsoft reported revenue of approximately $82.9 billion, up 18% year-over-year, operating profit of roughly $38.4 billion (up 20%), and earnings per share of $4.27 (up 23%). More significantly, Microsoft Cloud generated total revenue of $54.5 billion, a 29% increase year-over-year, while commercial remaining performance obligations surged 99% to $627 billion, with Azure and other cloud services revenue growing 40% year-over-year.
Microsoft CEO Nadella also disclosed that the company’s annualized revenue run rate from AI-related businesses has now exceeded $37 billion, representing a 123% year-over-year increase. For Wall Street, these figures signal that Azure is moving beyond the narrative of 'massive spending to chase AI trends' and is instead establishing a self-reinforcing AI monetization loop across cloud-based AI compute infrastructure, accelerated enterprise deployment of AI agents, Copilot, developer ecosystems, and model-as-a-service offerings. Combined with potential price increases upon cloud contract renewals, Microsoft’s cloud business revenue outlook and valuation multiples both have room for further upward revision.
Editor /rice