Microsoft Stock Receives Positive Outlook from Multiple Analysts

Citi maintains buy on Microsoft, stock price target steady By Investing.com

On Wednesday, Citi reaffirmed its positive stance on shares of Microsoft Corporation (NASDAQ:MSFT), maintaining a Buy rating and a $520.00 price target for the tech giant's shares. The endorsement comes as anticipation builds for Microsoft's forthcoming fourth-quarter results, with expectations set for a robust performance in both revenue and earnings. The financial institution highlighted Microsoft's leadership in artificial intelligence (AI) as a key factor, noting strong Azure cloud services and capital expenditure spending. Although shares have seen an 11% increase since the previous earnings report, the analyst believes that the upcoming quarterly results, while not a significant catalyst, will demonstrate the company's sustained growth trajectory. The analyst pointed out that, despite the positive outlook, there might be modest revisions to earnings per share (EPS) estimates. This is partly due to the market potentially not fully accounting for losses from investments in OpenAI. Nevertheless, the long-term growth story for Microsoft is expected to remain robust, with AI momentum forecasted to contribute to accelerating growth in the following fiscal years. Investors are looking ahead to see how Microsoft will capitalize on its AI initiatives and whether these efforts will translate into continued financial success. The company's consistent performance and strategic investments have kept it at the forefront of the tech industry, with Citi's analysis suggesting that this trend is likely to persist. In other recent news, Netflix Inc. (NASDAQ:NFLX) experienced its slowest subscriber growth in over a year during the April-June period, adding an estimated 4.82 million new subscribers. Despite this, the company's ad revenue and total revenue saw significant increases. Netflix's ad-supported tier reached 40 million monthly active users globally, accounting for 40% of all sign-ups in available markets. Meanwhile, Microsoft Corp . is under scrutiny by the United Kingdom's Competition and Markets Authority regarding the recruitment of former Inflection AI staff, including the appointment of Mustafa Suleyman as the leader of Microsoft's new consumer AI division. In financial news, Mizuho Securities raised its price target on Microsoft Corporation following robust growth in Microsoft's Azure cloud service. BMO Capital Markets also increased its price target for Microsoft due to optimism about the company's cloud business. On the other hand, the prospect of U.S. interest rate cuts is prompting investors to reconsider their strategies, potentially favoring other market segments that have underperformed this year, such as small-caps, real estate, and industrials. Finally, other significant developments include Netflix's strategy to leverage both original content and popular acquired shows to drive viewership, its expansion into live offerings, and its plans to develop an in-house advertising technology platform. Microsoft, on the other hand, has seen a boost in its AI advancements and is facing an investigation by the UK regulator over its hiring practices from Inflection AI. As Microsoft Corporation (NASDAQ:MSFT) heads into its next earnings report, the InvestingPro data underscores the company's strong financial position. With a market capitalization of a staggering $3.27 trillion and a significant revenue growth of 13.97% in the last twelve months as of Q3 2024, Microsoft's financial muscle is evident. The tech giant's P/E ratio stands at 37.98, reflecting its high earnings multiple which is in line with the high valuation multiples that are characteristic of industry leaders. Moreover, Microsoft's EBITDA has grown by 27.18% during the same period, indicating robust operational efficiency and profitability. InvestingPro Tips also reveal Microsoft's impressive track record of raising its dividend for 18 consecutive years, highlighting the company's commitment to returning value to shareholders. Moreover, Microsoft is noted for its low price volatility, which might be appealing for investors seeking stability in their portfolio. It is important to note that there are 16 additional InvestingPro Tips available that could provide further insights into Microsoft's performance and outlook. For investors and analysts looking to delve deeper into Microsoft's financial health and future prospects, InvestingPro offers a comprehensive analysis. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, allowing access to these valuable insights and the full list of InvestingPro Tips. Visit https://www.investing.com/pro/MSFT to explore more about Microsoft's investment potential.

Microsoft shares target lifted by TD Cowen on steady growth prospects By Investing.com

On Thursday, TD Cowen maintained a positive stance on Microsoft Corporation (NASDAQ:MSFT) shares, raising the price target to $495 from $470, while keeping a Buy rating on the stock. The firm's analysis points to a consistent performance in Microsoft's Office 365 Commercial segment, projecting a 14% constant currency (cc) growth. Although the previous quarter saw a 15% cc growth, the firm anticipates an in-line quarter for Microsoft, with vendor consolidation and Average Revenue Per User (ARPU) growth through upgrades serving as beneficial factors. The commentary from TD Cowen suggests that despite a slowing in seat growth and mixed feedback regarding the adoption of Copilot, Microsoft is expected to maintain a 1% growth influence from Copilot in its Fiscal Year 2025 Office estimates. Additionally, the firm's checks indicate a stabilization in PC demand, forecasting an in-line or possibly better-than-expected quarter with a 4% cc growth estimate. This is in the context of Intel (NASDAQ:INTC)'s expectation of approximately 3% PC growth in Calendar Year 2024, including over 40 million AI PCs. The release of AI-enabled PCs and tablets by Microsoft in mid-June is anticipated to provide a minor boost in the current quarter and a more significant impact in the second half of Calendar Year 2024. Notably, AI PCs are expected to carry a 5-10% Average Selling Price (ASP) premium. TD Cowen projects Microsoft's revenue growth at 16% cc, slightly above the Street's consensus of 15%, and an operating margin of 42.7%, aligned with the Street's expectations. The firm foresees continued momentum in Microsoft's performance, driven by robust demand for Azure AI and core services, alongside easier comparisons and a conservative margin guide. With shares trading at approximately 32 times the Calendar Year 2025 estimated Price to Earnings (P/E) ratio, TD Cowen posits that there is potential for upward revisions in financial estimates to further propel the stock's value, justifying the new price target of $495, which reflects around 35 times the Calendar Year 2025 estimated P/E. In other recent news, Microsoft Corporation has been the focus of several key developments. BofA Securities recently revised its shares target for the tech giant to $510, maintaining a Buy rating. This adjustment reflects anticipated growth in Microsoft's Office business, particularly due to the introduction of Copilot. Analysts predict a potential 20% growth in the Office segment by the first quarter of 2026 if trends continue favorably. On the financial front, Microsoft's fiscal third-quarter earnings reported a total revenue of $61.9 billion, surpassing analysts' forecast of $60.8 billion. This led to Mizuho Securities and BMO Capital Markets raising their price targets for Microsoft, citing strong growth in the company's Azure cloud service and overall cloud business. The UK's Competition and Markets Authority has initiated an investigation into Microsoft's hiring practices from AI startup Inflection AI. Meanwhile, GOP lawmakers have requested an intelligence briefing on Microsoft's $1.5 billion investment in UAE-based AI company G42, citing potential national security concerns. These developments underline the company's ongoing activities in the AI and cloud services sectors, as well as the regulatory and political challenges it faces. In light of TD Cowen's optimistic outlook on Microsoft Corporation (NASDAQ:MSFT), real-time data from InvestingPro provides a deeper financial perspective on the tech giant. Microsoft's market capitalization stands impressively at $3.3 trillion, indicating its immense scale and influence within the industry. The company's P/E ratio, a measure of its current share price relative to its per-share earnings, is at 38.95, which is considered high, suggesting that investors are anticipating high future earnings growth. Additionally, its revenue for the last twelve months as of Q3 2024 has grown by nearly 14%, a testament to Microsoft's ability to expand its business and maintain a competitive edge. InvestingPro Tips highlight Microsoft's consistency in rewarding shareholders, having raised its dividend for 18 consecutive years, a sign of financial health and a commitment to returning value. Moreover, the company's low price volatility indicates stability, which could be attractive to risk-averse investors. For those seeking more in-depth analysis, InvestingPro offers additional tips on Microsoft. To explore these insights and further enrich your investment strategy, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. Overall, the combination of strong fundamentals and strategic initiatives, such as the anticipated release of AI-enabled PCs and tablets, positions Microsoft favorably in the eyes of both analysts and investors, aligning with TD Cowen's raised price target and bullish stance.

Microsoft shares target lifted by BofA on Office growth potential By Investing.com

On Thursday, BofA Securities adjusted its outlook on Microsoft Corporation (NASDAQ:MSFT), increasing the shares target to $510 from the previous $480, while maintaining a Buy rating on the stock. The revision reflects expectations for the tech giant's Office business, driven by the introduction of Copilot, which is anticipated to contribute to revenue growth. The analyst from BofA Securities highlighted that Microsoft's shares are currently trading at 41 times the estimated free cash flow for calendar year 2025, suggesting that the market has priced in near-term growth prospects. Despite this, the analyst does not foresee a compression in the multiple, especially with the expected acceleration in the Office segment due to Copilot's influence. According to channel checks, while Copilot has not yet shown significant incremental traction, it has been recognized by 40% of surveyed partners as a contributing factor to revenue growth in the fourth quarter. This level of adoption aligns with the base case scenario of 1.7% penetration into the eligible E3/E5 customer base. The analyst further projected that the Office business could potentially see a 20% growth by the first quarter of fiscal year 2026 if trends continue favorably. The new price objective of $510 assumes a 46 times multiple on the forecasted free cash flow for calendar year 2025, an increase from the prior multiple of 43. The reiteration of the Buy rating and the raised price target on Microsoft's shares are based on the company's ability to potentially revise upward its growth forecast for the Office division, especially as new products like Copilot become more integrated into customer usage. In other recent news, Microsoft has been the subject of several key developments. The United Kingdom's Competition and Markets Authority (CMA) has begun an investigation into the tech giant's hiring of staff from Inflection AI, including Mustafa Suleyman, co-founder of Inflection AI, who now heads Microsoft's new consumer AI division. The outcome of the CMA's investigation could have significant implications for Microsoft's expansion in the AI sector. On the financial front, Microsoft's fiscal third-quarter earnings reported a total revenue of $61.9 billion, exceeding the $60.8 billion forecast by analysts. This positive performance led Mizuho Securities to increase its price target for Microsoft to $480 from $450, maintaining an Outperform rating. BMO Capital Markets also raised its price target to $500 from $465, citing expected growth in Microsoft's cloud business, particularly Azure. In the political arena, GOP lawmakers have requested an intelligence briefing concerning Microsoft's $1.5 billion investment in UAE-based AI company G42, citing potential national security concerns. This request comes as Microsoft faces scrutiny over the potential transfer of sensitive U.S.-origin technology and G42's connections to China. These recent developments highlight Microsoft's ongoing activities in the AI and cloud services sectors, as well as the regulatory and political challenges it faces. While the company has not yet responded to inquiries regarding the CMA investigation or the GOP's security concerns, these issues will undoubtedly play a significant role in the company's future strategies and operations. As BofA Securities updates its outlook on Microsoft (NASDAQ:MSFT), it's worth noting that Microsoft's financial robustness and market position are reflected in real-time metrics. With a market capitalization of $3.3 trillion, Microsoft is a behemoth in the tech industry. The company's P/E ratio stands at 38.95, indicating a premium valuation, which aligns with BofA's view of the stock trading at high earnings multiples. Additionally, Microsoft's recent revenue growth of nearly 14% in the last twelve months as of Q3 2024 underscores the company's ability to continue expanding its top line. InvestingPro Tips suggest that Microsoft has a history of consistent dividend growth, having raised its dividend for 18 consecutive years, which may appeal to income-focused investors. Moreover, the company operates with a moderate level of debt and its cash flows can sufficiently cover interest payments, indicating financial stability. For investors interested in a deeper dive, there are 16 additional InvestingPro Tips available, offering insights into Microsoft's valuation multiples, stock volatility, and profitability projections. To access these valuable tips and more, visit https://www.investing.com/pro/MSFT and consider using the coupon code UK10 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

ServiceNow shares get price target bump by Citi on continued outperformance By Investing.com

On Wednesday, Citi maintained its Buy rating on shares of ServiceNow (NYSE:NOW) and slightly increased its price target to $911 from $909. The firm's analyst highlighted the company's potential for continued outperformance in the face of a sluggish software demand environment. ServiceNow's expanding automation platform is expected to consolidate market share and leverage AI and GenAI use cases to create value in IT and back/mid-office operations. Concerns regarding the European economic climate were acknowledged, yet the analyst anticipates that this would be balanced by strong performance in North America and the Middle East, along with significant deal momentum. This includes one of ServiceNow's largest deals to date. The analyst projects that the company will surpass expectations and increase guidance due to substantial deal activity, an increasing contribution from the Pro-Plus segment, and heightened activity in the federal sector. Citi anticipates that ServiceNow will experience stronger positive revisions compared to the first quarter, driven by conservative estimates and potential acceleration in the combined remaining performance obligations (cRPO) metric in the second half of the year. This could serve as an additional catalyst for the company's performance. The firm has adjusted its top-line estimates upward for ServiceNow, while also aligning free cash flow (FCF) margins with the targets set during the company's analyst day. The revised price target of $911 reflects a positive outlook for the company's upcoming earnings. In other recent news, CMB International expressed optimism for tech giants Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and ServiceNow, citing artificial intelligence and margin expansion as key investment themes. The firm anticipates sustained growth for these companies, despite mixed revenue growth among U.S. internet and software companies. ServiceNow was also the focus of analyst firms Needham, TD Cowen, and Oppenheimer, all maintaining positive ratings on the company's stock. ServiceNow has been making strides in AI integration and announced an enhanced partnership with Microsoft. On the other hand, DNOW Inc. reported Q1 earnings and revenue that fell short of expectations, yet the company remains optimistic, upgrading its full-year outlook for 2024. These are some of the recent developments for both ServiceNow and DNOW Inc. It's worth noting that the performances of these companies are subject to various factors, including market conditions and internal strategies. As Citi maintains a bullish stance on ServiceNow, current InvestingPro data provides additional context to the company's financial health. ServiceNow's market capitalization stands at a robust $151.38 billion, underscoring its significant presence in the software industry. With a high gross profit margin of 78.87% over the last twelve months as of Q1 2024, the company demonstrates its capacity to maintain profitability amid a challenging economic landscape. Moreover, the P/E ratio, while on the higher end at 78.25, is complemented by a low PEG ratio of 0.22, suggesting that ServiceNow's earnings growth could justify its valuation. InvestingPro Tips highlight ServiceNow's impressive gross profit margins and its status as a prominent player in the Software industry. These insights are particularly relevant given the company's focus on leveraging AI and GenAI to drive value in IT and operations, aligning with the analyst's positive outlook. With analysts predicting profitability this year and a strong return over the last five years, ServiceNow's financials paint a picture of a company that is navigating the demands of the market effectively. To gain deeper insights and additional InvestingPro Tips, readers can take advantage of an exclusive offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. This offer provides access to a wealth of financial data and expert analysis to help investors make informed decisions. There are 14 additional InvestingPro Tips available for ServiceNow, each offering strategic guidance based on real-time data and market trends.