Microsoft stock surged 4.1% after UBS analyst Karl Kierstead lowered his price target to $600 but still recommended buying. Investing now could yield a 28% profit in 12 months.

UBS cites the growth of Microsoft Azure data centers as a catalyst for Intelligent Cloud business growth. However, concerns about software sector de-rating and high valuation remain.

Despite a forecasted 14% earnings growth, Microsoft’s stock may be too expensive at a 32-times price-to-earnings ratio and 43-times price-to-free cash flow ratio.

Consider other stock options as Microsoft is not among the top 10 stocks recommended by The Motley Fool Stock Advisor team for potential high returns. Stock Advisor boasts a total average return of 937% compared to the S&P 500’s 195%.

Read more at Nasdaq: Why Microsoft Stock Popped Friday