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Investing.com - Oppenheimer raised its price target on Microsoft (NASDAQ:MSFT) to $630.00 from $600.00 on Thursday, while maintaining an Outperform rating on the stock. The tech giant, currently trading at $513.24, sits near its 52-week high of $518.29, with a substantial market capitalization of $3.81 trillion.
The price target increase follows Microsoft’s fiscal fourth-quarter results, which Oppenheimer described as "excellent" and exceeding high investor expectations. The quarter was highlighted by 39% growth in Azure and other Cloud Services revenue, along with signs of business acceleration. This performance aligns with the company’s broader growth trajectory, as shown by its 14.13% revenue growth over the last twelve months. InvestingPro analysis reveals 17 additional key insights about Microsoft’s performance and valuation metrics.
Microsoft’s growth outperformance translated into record earnings and free cash flow, according to Oppenheimer. The firm noted that Microsoft’s financial results support their view that the company is well-positioned to benefit from cloud computing and artificial intelligence trends. The company maintains a healthy dividend yield of 0.65% and trades at a P/E ratio of 39.31, though current valuations suggest the stock may be trading above its Fair Value.
For the fiscal first quarter, Microsoft guided for 37% growth in Azure and other Cloud Services revenue, which represents a deceleration despite an easier year-over-year comparison. Oppenheimer suggested this guidance may prove conservative, similar to the company’s second half fiscal 2025 outlook.
Oppenheimer characterized Microsoft as "most leveraged in software to the next waves (Cloud and AI) of application modernization and expansion," with capability to deliver a "Rule of 60+" business profile at an unprecedented scale.
In other recent news, Microsoft reported strong fourth-quarter fiscal 2025 results, with Azure cloud revenue growing by 39% at constant currency, surpassing guidance by 4.5 percentage points. This performance led Wolfe Research to raise its price target for Microsoft to $675, maintaining an Outperform rating. Additionally, Barclays (LON:BARC) increased its price target to $625, noting a 3.5% revenue beat and a 7% operating profit beat, with operating margins ahead by 180 basis points. Morgan Stanley (NYSE:MS) also raised its price target to $582, citing Microsoft’s durable margins, which ended FY25 at 45.6%, an increase of 100 basis points year-over-year. KeyBanc upgraded Microsoft’s stock rating to Overweight, highlighting the significant acceleration in Azure’s growth, which increased from 31% in January to 39% by the fiscal year’s end. Meanwhile, the UK’s Competition and Markets Authority is considering designating Microsoft with strategic market status in cloud services due to its dominant position, which it says negatively affects competition. These developments reflect Microsoft’s strong market performance and ongoing regulatory scrutiny.
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