Trump announces trade deal with EU following months of negotiations
Investing.com - KeyBanc has reiterated its Sector Weight rating on Microsoft (NASDAQ:MSFT), currently trading at $513.71 with a market capitalization of $3.82 trillion, ahead of the company’s fourth-quarter earnings report scheduled for July 30. According to InvestingPro analysis, the stock is trading above its Fair Value, with strong year-to-date returns of 22.35%.
The firm highlighted positive indicators from its quarterly value-added reseller (VAR) checks, noting that the number of resellers and partners meeting or exceeding plans has increased to "some of the healthiest levels" they’ve observed. This aligns with Microsoft’s robust revenue growth of 14.13% over the last twelve months.
KeyBanc’s cloud instances tracker suggests high single-digit sequential growth, with the firm’s overall data and conversations pointing to a strong conclusion to Microsoft’s fiscal year 2025.
Regarding Microsoft’s Copilot AI assistant, KeyBanc reported that approximately 60% of customers are implementing the tool for just 10% of their Microsoft 365 user base, while only 4% are rolling it out across all their E3 or E5 licenses.
Even with limited adoption, KeyBanc calculates that Copilot implementation for 10% of seats would translate to approximately 6% average revenue per customer lift, though the firm noted that continued slowdown in Microsoft 365 Commercial growth despite this pricing uplift could indicate adoption rates falling short of "bullish hopes."
In other recent news, Microsoft is investigating a potential leak in its cybersecurity alert system, which may have allowed Chinese hackers to exploit vulnerabilities in its SharePoint service before they were patched. This issue has also impacted systems at the U.S. Department of Energy, including those of the National Nuclear Security Administration. The department reported being "minimally impacted," attributing this to its use of Microsoft M365 cloud services and strong cybersecurity measures. Meanwhile, Evercore ISI has raised its price target for Microsoft to $545, maintaining an Outperform rating, reflecting trends in Azure cloud computing and headcount adjustments. UBS also increased its price target to $600, citing potential Azure growth exceeding Microsoft’s guidance and positive effects from recent workforce reductions. Additionally, GitHub, a Microsoft subsidiary, launched GitHub Spark, a platform that allows developers to build applications using natural language commands. This tool is designed to streamline the app development process by reducing the need for extensive setup. These developments highlight Microsoft’s ongoing efforts in cloud computing and cybersecurity.
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