Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com-- Guggenheim upgraded its rating on Microsoft Corporation (NASDAQ:MSFT) on Sunday, stating that the company stood to be a beneficiary of artificial intelligence, and that its dominance in productivity software was expected to keep driving earnings.
Guggenheim upgraded Microsoft to Buy from Neutral, with a price target of $586.0, which represents upside of about 12% from current levels.
The brokerage said that it was clear that Microsoft and its AI “hyperscalers” were set to benefit further from the fast-growing technology.
AI will boost Microsoft’s Azure cloud services, Guggenheim said, while the company also has several opportunities to monetize AI from its “near monopoly” in productivity software.
Guggenheim also flagged strength in Microsoft’s Windows operating system, which it expects to outperform consensus numbers in the near-to-medium term.
The brokerage noted that Microsoft, from a valuation perspective, has not been cheap for at least a decade, and is unlikely to be cheap for at least another year.
The Guggenheim upgrade comes just days before Microsoft’s September quarter earnings, which are due after the market close on Wednesday. The software giant is forecast to clock earnings per share of $3.66 on revenue of $75.32 billion, Investing.com data showed.
Both figures are up from last year, as Microsoft continues to benefit from its rapidly growing AI offerings.
But focus will be on Microsoft’s margins, especially as the company pledged tens of billions of dollars towards AI development.