1、M IdeaMicrosoft|North America2Q25 CIO Survey Takeaways GenAI Leadership Position SustainsNear-term demand trends appear stable with CIO sentiment largely unchanged from last quarter.Microsofts leadership position in GenAI remains consistently strong.Positively,CIOs expect to deploy M365 Copilot acro

2、ss 31%of endpoints over NTM,up from Q4s 17%,suggesting improving penetration.M Microsoft Well Positioned for Attractive AI Opportunity,Remaining a Key Generative AI Winner.Our 2Q25 CIO survey suggests fairly stable CIO spending intentions,which were largely unchanged sequentially,with CIOs now expec

3、ting IT budget growth of+3.6%YoY in 2025(-10bps vs.Q1)and Software spending intentions at+3.6%YoY in 2025(-18bps vs.Q1).However,Microsoft has been able to maintain its leadership position in terms of core spending intentions and specifically related to capturing share of GenAI spend.Relative to broa

4、der software,CIOs expect Microsoft to see the highest forward year spending growth at+6.3%,slightly moderating from+6.5%in our 4Q24 survey,though Microsoft continues to lead the pack as 67%of CIOs also expect an increase in net spending on Microsoft tools,emblematic of the companys AI leadership pos

5、ition.We continue to view the durability of Azure growth and EPS growth as underappreciated at 28x GAAP FY27 P/E;remain Overweight.Core Microsoft spending intentions:1)Azure spend intentions remained durable in 2Q25 of the CIOs who currently use or plan to use Azure,57%expect to increase spend over

6、the next 12 months,largely inline with the heightened 60%of CIOs expecting to increase Azure spend observed in 2Q24;2)O365 spending intentions incrementally upticked with 55%of CIOs indicating intent to increase spend in the next 12 months,versus 47%in 2Q23 and 46%in 2Q24 while the longer-term E1/E3