After Microsoft’s post-earnings report, the stock experienced a 1% dip due to disappointing cloud revenue despite strong overall results in the fiscal fourth quarter. The Intelligent Cloud segment brought in $28.52 billion in revenue, slightly lower than the $28.68 billion expected by analysts. However, Wall Street analysts believe that this pullback presents a buying opportunity for investors.
Analysts’ Recommendations
Goldman Sachs Analyst Kash Rangan maintained a buy rating on Microsoft and reiterated his $515 per share price target, suggesting a 22% upside from the closing price. Rangan highlighted Microsoft’s strong position in the cloud stack, along with its potential to capitalize on long-term trends such as Gen-AI, public cloud adoption, and digital transformation.
JPMorgan Chase Analyst Mark Murphy stood by his overweight rating and $470 price target, emphasizing the clear long-term signal for Azure and AI despite the weak cloud revenue in the latest quarter. Murphy believes that Azure growth will reaccelerate in the first half of CY25, indicating an 11% upside from the current levels.
Wells Fargo Analyst Michael Turrin also raised his price target to $515 and maintained an overweight rating on the stock. Turrin expressed confidence in Microsoft’s future growth prospects, driven by continued expansion in IT spend categories, strong positioning in multiple markets, and sustainable margin expansion.
Investment Outlook
Despite the short-term volatility and market fluctuations, analysts see Microsoft’s AI momentum as robust and unaffected by quarterly results. The company’s cloud growth is expected to pick up, and its artificial intelligence offerings are viewed as promising, aligning with the long-term trajectory and investor sentiment.
Wall Street analysts view Microsoft’s post-earnings pullback as a buying opportunity for investors. The company’s strong position in the cloud market, coupled with its AI capabilities, presents a compelling investment case for long-term growth. While short-term weaknesses may persist, the overall outlook for Microsoft remains positive, with analysts projecting upside potential in the stock price. Investors are advised to consider these recommendations and conduct their own due diligence before making investment decisions.