Microsoft’s (MSFT) stock has gained 10% in the past five trading sessions as a recovery in beaten-down software names takes hold. But is now the right time to buy shares of the tech giant?
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MSFT stock has plunged this year as investors worry about whether its software products will be disrupted by artificial intelligence (AI). Despite the current rise, Microsoft’s shares are still down about 30% from their all-time high reached last year.
However, Microsoft and other software stocks are starting to recover as investors come to realize that AI disruption fears may have been overblown. MSFT stock is also getting a lift from a new survey of IT and cybersecurity executives that view its products favorably.
Microsoft’s Strong Position
The survey by KeyBanc (KEY) polled dozens of value-added resellers, which are companies that customize third-party products before selling them. Microsoft’s core products of AI Copilot, Azure cloud-computing, and cybersecurity products were all rated favorably.
“Nearly half of respondents have rolled Copilot out into production, up 14 points vs. 4Q, and [Microsoft] garnered most responses in highest adoption in securing AI workload,” wrote KeyBanc in a research note. At the same time, 85% of respondents expect to increase spending on Microsoft’s products and services, the highest level in five quarters.
The strong survey responses and increased spending intentions suggest that the current rally in MSFT stock could continue, making now a good time to buy.
Is MSFT Stock a Buy?
Microsoft’s stock has a consensus Strong Buy rating among 37 Wall Street analysts. That rating is based on 34 Buy and three Hold recommendations issued in the last three months. The average MSFT price target of $581.61 implies 56% upside from current levels.
