Following Microsoft’s recent earnings report, Wall Street analysts have expressed confidence in the technology giant despite a post-earnings pullback. Although Microsoft experienced a 1% dip in its stock price due to disappointing cloud revenue in the fiscal fourth quarter, analysts view this as a potential buying opportunity for investors. The Intelligent Cloud segment of the company generated $28.52 billion in revenue, slightly below the $28.68 billion expected by analysts. However, firms such as Goldman Sachs and JPMorgan believe that the weakness presents an entry point for investors, predicting that Microsoft’s cloud growth will rebound and its artificial intelligence offerings will continue to show promise.
Goldman Sachs Analyst Kash Rangan maintained a buy rating on Microsoft and reiterated a $515 per share price target, implying a 22% upside from the current stock price. Rangan highlighted Microsoft’s strong presence across all layers of the cloud stack, positioning the company to benefit from long-term trends such as Gen-AI, public cloud consumption, SaaS adoption, digital transformation, AI/ML, BI/analytics, and DevOps. He is optimistic about Microsoft’s future growth prospects in various technological sectors.
JPMorgan Chase Analyst Mark Murphy stood by his overweight rating and $470 price target on Microsoft, indicating an 11% potential upside. Despite the weak cloud revenue in the fourth quarter, Murphy emphasized the clear long-term signals for Azure and AI. He mentioned that although non-AI consumption saw a slight decline, Azure growth is expected to accelerate in the first half of CY25. Murphy’s confidence in Microsoft’s AI momentum and long-term trajectory remains strong, aligning with the company’s survey data and projections.
Wells Fargo Analyst Michael Turrin raised his price target to $515 and maintained an overweight rating on Microsoft. Turrin encouraged investors to take advantage of near-term weakness in the stock, expressing his belief that Microsoft’s shares will not remain down for long. He cited the company’s growth prospects in various IT categories, the ability to monetize its strong market positioning, and a consistent margin expansion in its financial profile. Turrin acknowledged that Microsoft’s stock is trading near historical highs but justified it by pointing out the company’s early lead in AI and entrenched position in a competitive market.
Analysts on Wall Street are bullish on Microsoft’s future prospects despite the recent post-earnings pullback. The consensus among experts is that the company’s cloud and AI segments will drive growth in the long term, making the current dip in stock price an attractive opportunity for investors. With strong endorsements from reputable firms like Goldman Sachs, JPMorgan Chase, and Wells Fargo, Microsoft stands poised for continued success in the evolving technology landscape.