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On Monday, Stifel analysts maintained a positive outlook on Microsoft Corporation (NASDAQ:MSFT) shares, reiterating a Buy rating and a $475.00 price target. With Microsoft currently trading at $390.58 and analyst targets ranging from $415 to $650, InvestingPro analysis suggests the stock is slightly overvalued at current levels, despite its GREAT financial health score. The analysts highlighted the company’s continued success in its enterprise software segment, noting that recent results showed no disruption in net-new business through March, suggesting a strong performance for Microsoft’s bookings. The company’s robust performance is reflected in its impressive 15% year-over-year revenue growth and 69.4% gross profit margin. Want deeper insights? InvestingPro offers 13 additional key tips about Microsoft’s financial strength and market position.
The firm expressed confidence in Microsoft’s AzureAI, which has been exceeding forecasts for the last several quarters, attributing this success in part to robust usage of ChatGPT. Additionally, they pointed out that Microsoft management is taking active steps to address go-to-market (GTM) challenges within its non-AI Azure business. While improvements from these efforts are expected to take some time, Stifel anticipates an Azure performance that aligns with the company’s guidance, which predicts a year-over-year constant currency growth of 31-32%.
Looking ahead, Stifel anticipates that the normalization of supply and demand imbalances will likely accelerate Azure’s AI business in the second half of calendar year 2025. However, due to the adjustments being made within the non-AI Azure segment and the uncertain economic landscape, the analysts forecast that the core Azure business may continue to encounter growth obstacles. This could result in a moderate deceleration of total Azure growth in the upcoming quarters. Stifel’s expectations are more conservative compared to the acceleration narrative provided by Microsoft’s management earlier in the fiscal year but align with current market expectations. With Microsoft’s next earnings report due on April 30, InvestingPro subscribers can access comprehensive analysis and real-time updates through our detailed Pro Research Report, available for over 1,400 top US stocks.
In other recent news, Alphabet (NASDAQ:GOOGL) reported first-quarter results that exceeded expectations, primarily due to the strong performance of its search advertising business. This positive outcome led to a 6% rise in Alphabet’s stock and has been viewed favorably by analysts, including Citigroup (NYSE:C)’s Ronald Josey, who noted the promising results for other tech giants. Meanwhile, Goldman Sachs revised Microsoft’s stock price target to $450, down from $500, while maintaining a Buy rating. The firm’s analyst, Kash Rangan, anticipates an 11% revenue growth for Microsoft, with particular optimism about its Azure cloud service and AI contributions.
In another development, Tesla (NASDAQ:TSLA) increased its vehicle prices in Canada, urging buyers to purchase before potential counter-tariffs on U.S.-made vehicles take effect. Nvidia (NASDAQ:NVDA)’s shares saw a decline following reports that Huawei plans to test a new AI processor aimed at replacing some of Nvidia’s products. Additionally, Japan’s NTT Data has partnered with OpenAI to roll out AI tools globally, focusing on data security enhancements. These recent developments reflect ongoing changes and strategic moves within major tech companies, impacting both their market positions and investor considerations.
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