Microsoft (MSFT), the software and cloud computing giant, is scheduled to announce its fiscal third-quarter results on April 29. Ahead of Q3 earnings, top BMO Capital analyst Keith Bachman lowered his price target on MSFT stock to $505 from $575 while maintaining an Outperform rating.
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For Q3, analysts expect Microsoft to report earnings per share (EPS) of $4.06 on revenue of $81.3 billion, up from $3.46 per share and $70.1 billion in the same period last year.
BMO Analyst Sees Limited Near-Term Upside
The analyst expects only modest upside in the upcoming results and does not see the March quarter as a major catalyst for the stock. He noted that ongoing investor concerns around the software sector continue to weigh on sentiment and valuations.
Bachman believes that broader compression in software multiples has driven the reduction in his price target, rather than any major change in Microsoft’s long-term fundamentals.
Looking ahead, the analyst pointed to capital spending as a key area to watch. He believes consensus estimates for FY27 capex remain too low and expects management to provide more clarity on future spending plans.
Any updates on this front could act as a “clearing event” for investors, helping reset expectations around Microsoft’s investment cycle. Overall, while Bachman sees some near-term risk around operating income guidance, he remains positive on Microsoft’s long-term growth outlook.
Is Microsoft a Good Stock to Buy Now?
Analysts remain overwhelmingly bullish on Microsoft stock. Of the 35 analysts tracked by TipRanks, 33 have issued Buy ratings, while only two rate the stock as Hold. Their average price target of around $570.15 implies 33.18% upside from current levels.
