Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com - Guggenheim upgraded Microsoft (NASDAQ:MSFT) from Neutral to Buy on Monday, setting a price target of $586.00. The stock, currently trading at $523.61, is near its 52-week high of $555.45, with InvestingPro data indicating the company is trading above its Fair Value.
The upgrade reflects Guggenheim’s view that Microsoft is a clear beneficiary in the artificial intelligence landscape, particularly through its Azure cloud platform.
The research firm highlighted Microsoft’s "near monopoly" in the Productivity Suite market with its Office products, which positions the company to directly monetize AI offerings like Copilot tied to that product suite.
Guggenheim also expressed confidence in Windows outperforming consensus expectations over the near to medium term, noting that this "second monopoly" likely contributes close to 20% of Microsoft’s profit despite representing only about 10% of total revenue.
The firm believes Microsoft is "set up well to outperform for the rest of this year" following what it described as an "exceptionally strong quarter" in the fourth fiscal quarter of 2025.
In other recent news, Microsoft is facing legal action in Australia as the Australian Competition and Consumer Commission (ACCC) has sued the company. The ACCC alleges that Microsoft misled 2.7 million customers by not clearly informing them how to opt out of paying for new AI services during subscription renewals. Meanwhile, Microsoft is gearing up for its first-quarter earnings report, with Guggenheim forecasting a modest beat in revenue expectations across all three business segments. TD Cowen has reiterated its Buy rating, citing increased Azure data center activity as a positive indicator for AI demand and potential growth in Microsoft’s cloud business. Stifel also maintained its Buy rating, highlighting previous strong performance in Azure and EPS, despite the stock’s recent underperformance compared to the IGV index. These developments come amid OpenAI’s acquisition of Software Applications Incorporated, the company behind the Sky interface for Mac computers.
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