Key insights
- UBS lowered its MSFT price target to $510 due to concerns around M365 and Copilot adoption, despite maintaining a Buy rating. Other analysts have mixed views, with some lowering targets due to Copilot reorganization while others remain bullish on cloud and AI growth. Overall, the report suggests some uncertainty around Microsoft's near-term growth prospects, leading to a slightly negative impact on US equities.
Investing.com - UBS cut its price target on Microsoft Corp. (NASDAQ:MSFT) to $510 from $600 while keeping a Buy rating on the shares. The stock currently trades at $372.74, down roughly 23% year-to-date, though InvestingPro data suggests the company remains undervalued at current levels.
Analyst Karl Kierstead made the adjustment following two weeks of investor meetings in Asia and Australia with Microsoft’s investor relations team.
The firm said the narrative around M365 and Copilot needs to improve for the stock to re-rate higher. UBS values the shares at 19 times calendar year 2026 estimated non-GAAP earnings per share. Notably, an InvestingPro tip reveals that 17 analysts have revised their earnings upwards for the upcoming period, suggesting broader optimism despite UBS’s caution. For deeper insights, investors can access Microsoft’s comprehensive Pro Research Report, one of 1,400+ available on the platform.
The analyst reviewed key investor debates, Microsoft’s responses and the firm’s own views in a research report. UBS planned to discuss its findings on an investor call at 8:30 a.m. Eastern Time on Wednesday, March 25.
The firm maintains its Buy rating on Microsoft despite lowering the price target by $90 per share.
In other recent news, Microsoft Corp. reported a 15% growth in total revenue for the second fiscal quarter, driven by a 38% increase in Azure’s performance, according to Evercore ISI. Despite this positive revenue growth, Melius expressed concerns over Microsoft’s Copilot reorganization and lowered its price target to $400, maintaining a Hold rating. Meanwhile, BofA Securities reinstated coverage of Microsoft with a Buy rating, setting a price target of $500, citing strong growth prospects in cloud and artificial intelligence. Stifel maintained a Hold rating following Microsoft’s AI product announcements at the NVIDIA GTC conference, including new integrations with NVIDIA technologies. Evercore ISI reiterated an Outperform rating, emphasizing Azure’s growth potential despite challenges in AI strategy and capital expenditures. Additionally, Microsoft was part of a broader tech stock rally as geopolitical tensions eased, with shares rising approximately 0.8%. These developments reflect a mix of optimism and caution among analysts regarding Microsoft’s future trajectory.
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