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Investing.com - Cantor Fitzgerald raised its price target on Microsoft (NASDAQ:MSFT) to $639.00 from $581.00 on Thursday, while maintaining an Overweight rating on the stock. The tech giant, currently trading at $539.50 and commanding a market capitalization of $4.03 trillion, has shown remarkable momentum with a 24% gain over the past six months. According to InvestingPro analysis, Microsoft maintains a "GREAT" financial health score of 3.04 out of 5.
The price target increase follows Microsoft’s fourth-quarter fiscal 2025 earnings report, which showed stronger-than-expected performance. Azure, Microsoft’s cloud computing service, posted 39% year-over-year growth in the quarter, exceeding the company’s guidance of 34.5% and market expectations of approximately 36%. This growth contributes to Microsoft’s overall revenue expansion of 14.13% over the last twelve months, though the stock’s P/E ratio of 39.31 suggests premium pricing. For deeper insights into Microsoft’s valuation and growth metrics, check out the comprehensive Pro Research Report available on InvestingPro.
Microsoft reported that demand continues to outstrip supply for its cloud services, with the company now expecting supply-demand equilibrium to be reached by the end of calendar year 2026, rather than the end of fiscal year 2025 as previously anticipated.
For the first quarter of fiscal 2026, Microsoft guided total revenue 3% above consensus estimates on a constant currency basis, with Azure projected to grow 37%, which is 350 basis points ahead of the 33.5% growth analysts had expected.
The company also significantly increased its capital expenditure guidance to more than $30 billion for the first quarter of fiscal 2026, representing over 50% growth compared to analyst expectations of $23.75 billion.
In other recent news, Microsoft reported total revenue of $76.4 billion for the fiscal fourth quarter, showing a 17% year-over-year growth in constant currency, surpassing analyst expectations of $73.8 billion. This strong financial performance has led several analyst firms to raise their price targets for Microsoft. Mizuho (NYSE:MFG) increased its target to $625, while Scotiabank (TSX:BNS) and BMO Capital both raised theirs to $650, each maintaining an Outperform rating. Oppenheimer also raised its price target to $630, citing Microsoft’s "excellent" quarterly results and Azure’s significant 39% growth. Scotiabank noted that Microsoft’s management expects a 37% rise in Azure’s constant currency growth for the first quarter of fiscal 2026, which is above market expectations.
In regulatory news, the UK’s Competition and Markets Authority (CMA) has expressed concerns over Microsoft and Amazon (NASDAQ:AMZN)’s dominance in the cloud computing sector. The CMA highlighted that this dominance might be stifling competition due to technical and commercial barriers that complicate switching providers. The inquiry group suggests that the regulator should consider designating Microsoft and Amazon with strategic market status in cloud services, potentially leading to tailored conditions on their operations. These developments reflect the ongoing scrutiny and challenges faced by major tech companies in maintaining competitive practices.
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