The firm said it started coverage on the tech giant as it believes Microsoft's strategic transition from a "monopolistic" Windows company to a new age "mobile cloud first world" will make it stronger and improve both revenue growth and margins over the long term.
"In our opinion, Microsoft's cloud platform, Azure, and cloud applications such as office 365 are under appreciated and will likely be key pillars to Microsoft growth going forward," Wunderlich Securities said in an analyst note.
The firm set a $52 price target on Microsoft stock.
"Microsoft is addressing many secular movements within IT such as mobile and cloud computing; however, its historical Windows franchise will face pressure as the evolution continues, creating volatility and, more important, opportunity," the note continued.
Shares of Microsoft are down by 0.09% to $45.69 in late afternoon trading on Tuesday.
Separately, TheStreet Ratings team rates MICROSOFT CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICROSOFT CORP (MSFT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."