Stock market today: S&P 500 extends monthly win streak despite Nvidia-led stumble
Investing.com - Mizuho (NYSE:MFG) raised its price target on Microsoft (NASDAQ:MSFT) to $625 from $540 on Thursday, while maintaining an Outperform rating following the company’s fourth-quarter earnings report. The new target aligns with the broader analyst consensus, as Microsoft, currently trading near its 52-week high with a market cap of $4.03 trillion, maintains a strong "Buy" recommendation with analyst targets ranging from $432 to $700.
Microsoft reported total revenue of $76.4 billion for the quarter, representing 17% year-over-year growth in constant currency, significantly exceeding analyst expectations of $73.8 billion. According to InvestingPro, the company maintains excellent financial health with a "GREAT" overall score, supported by strong profitability metrics and consistent revenue growth of 14.13% over the last twelve months.
Azure revenue grew 39% year-over-year in constant currency, surpassing management’s guidance of 34%-35% and marking the second consecutive quarter of acceleration. The strong performance was attributed to robust cloud migration activity and continued strong demand for artificial intelligence services. Trading at a P/E ratio of 39.31, Microsoft’s premium valuation reflects its market leadership and growth potential. For deeper insights into Microsoft’s valuation and growth metrics, check out the comprehensive Pro Research Report available on InvestingPro.
Microsoft management projected Azure revenue growth of 37% year-over-year in constant currency for the first quarter, substantially above Wall Street’s projection of 33.5-34.0%.
Mizuho expressed confidence in Microsoft’s medium-term revenue growth opportunities, citing tangible AI adoption and monetization levers as key factors supporting its bullish outlook on the company.
In other recent news, Microsoft has seen a series of upward revisions in its stock price targets by several analyst firms following its strong fiscal fourth-quarter performance. Wolfe Research increased its price target to $675, citing Azure cloud revenue growth of 39%, which exceeded guidance. Similarly, Scotiabank (TSX:BNS) and BMO Capital both raised their price targets to $650, highlighting the impressive growth in Azure services. Oppenheimer also adjusted its target to $630, noting the excellent quarterly results and signs of business acceleration.
These revisions come amid Microsoft’s continued dominance in the cloud computing sector. However, the UK’s Competition and Markets Authority has raised concerns about the competitive landscape, suggesting that Microsoft’s and Amazon (NASDAQ:AMZN)’s market positions may be harming competition. The regulator is considering whether to designate these companies with strategic market status, which could lead to specific conditions being imposed on their operations. These developments reflect Microsoft’s significant influence in the cloud services market while highlighting regulatory scrutiny over its market power.
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