We know that tech giant Microsoft (MSFT) has been laying off workers left, right and center. But for the survivors, a new and grimmer reality may be in the offing as Microsoft looks to set up a harsher return to office (RTO) mandate. Investors, meanwhile, wondered if Microsoft was trying to bayonet its own survivors, and sent shares down fractionally in Wednesday afternoon’s trading.
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Microsoft has had a flexible work policy in place since 2020, back when flexible work policies were all but required for companies wanting to get anything done at all. Employees could work from home as much as half the time without approval, and in many cases, employees could work from home even more often than that with little pushback from management.
The plan as it sat helped Microsoft reach huge profits, but apparently, Microsoft thinks that it will somehow be better off if it makes employees show up at the office more often. Thus, Microsoft is considering a new policy that requires employees in the office at least three days a week. This is not a huge change; if employees worked a five-day week, which many likely do, all it really does is add a half-day to the current requirement. Interestingly, earlier reports said Microsoft would not be making changes to the remote work policy unless productivity had dropped noticeably. Given Microsoft’s latest earnings figures, it is hard to see how that happened.
New Xbox Specs Drop
Meanwhile, with the seven-year mark for the latest console generation about a year and a half out, thoughts are already turning to the next generation. We have heard some word about Microsoft’s plans herein, to make a console that is more in line with a gaming PC than a console might be. More details have emerged on this front as well.
First, the Magnus APU we talked about yesterday will be backed up by a Zen 6 processor as well as an RDNA 5 graphics processor. These are considered high-end parts, which suggests the next Xbox could be a monster. Further reports suggest an AT2 die, with up to 18 gigabytes of GDDR7 memory providing as much as 864 gigabytes per second of memory bandwidth. Naturally, all this could change before the system actually breaks cover. But the early reports suggest Microsoft will not be quietly bowing out of the console race.
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 34 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 32.46% rally in its share price over the past year, the average MSFT price target of $624.17 per share implies 18.62% upside potential.
