Several analysts are lowering their price targets on Microsoft’s (MSFT) stock after the technology giant’s latest financial results.
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Analysts at Scotiabank (BNS) lowered their price target on MSFT stock to $600 from $650. At the same time, TD Cowen (TD) took its price target on Microsoft’s shares down to $610 from $625. However, both firms maintained a Buy rating on Microsoft’s stock following the company’s print.
Analysts at JPMorgan Chase (JPM) also weighed in, trimming their price target on MSFT stock to $550 from $575, while maintaining a Buy-equivalent overweight rating on the shares. The lowered price targets come after Microsoft’s results showed slowing cloud growth and rising capital expenditures on artificial intelligence (AI).
Microsoft’s Difficult Results
Microsoft managed to beat Wall Street forecasts on its top and bottom line results for what was its fiscal second quarter. However, Microsoft announced that revenue from its cloud computing unit grew 39%, down from 40% growth in the previous quarter. Wall Street was expecting 39.4% growth from the cloud unit.
Microsoft’s capital expenditures and finance leases in the most recent quarter, which are mostly comprised of spending on AI, came to $37.5 billion, up 66% from a year earlier. That was more spending than the $34.31 billion that Wall Street had anticipated. The result is that MSFT stock is down 12% on Jan. 29, a day after the print.
Is MSFT Stock a Buy?
Microsoft’s stock has a consensus Strong Buy rating among 36 Wall Street analysts. That rating is based on 35 Buy and one Hold recommendations issued in the last three months. The average price target on MSFT stock of $604.13 implies 42.77% upside from current levels. These ratings could change further after the company’s financial results.
