Wall Street analysts see the drop in Microsoft’s stock price after the company’s earnings report as a buying opportunity. The company’s shares fell 1% after a better-than-expected overall performance in the fourth quarter was overshadowed by disappointing cloud revenue. Microsoft’s Intelligent Cloud division earned $28.52 billion in revenue last quarter, while analysts surveyed by LSEG had expected $28.68 billion. Despite MSFT’s year-to-date surge in Microsoft shares, analysts at Goldman Sachs and JP Morgan argued that the weakness created an entry point for investors. They also noted that the company’s cloud growth has reaccelerated and its artificial intelligence offerings remain promising. Here’s what some Wall Street analysts said after Microsoft released its earnings. Goldman Sachs analyst Kash Langan maintained his buy recommendation on Microsoft and reiterated his $515 per share price target. Langan’s forecast suggests an upside of about 22% from Tuesday’s closing price. “With a strong presence across all layers of the cloud stack including applications, platform and infrastructure, we believe Microsoft is well-positioned to capitalize on many long-term secular trends including Gen-AI, public cloud consumption and SaaS. [software as a service] “AI adoption, digital transformation, AI/ML, BI/analytics, DevOps (other).” JPMorgan Chase analyst Mark Murphy maintained his overweight rating and $470 price target on Microsoft, noting that despite weak cloud revenues, “the longer-term signals for Azure and AI are clear.” Murphy’s forecast suggests upside of about 11% going forward. “Non-AI consumption declined slightly in Q4, but capital spending continues to trend upward, informed by customer demand signals, and Azure growth is expected to re-accelerate in 1H25,” Murphy said. “In short, despite quarter-to-quarter fluctuations, we believe Microsoft’s AI momentum is alive and well and its long-term trajectory is unshakeable, which is consistent with our research and view heading into the Q4 earnings release.” Wells Fargo analyst Michael Turlin raised his price target to $515. Turin, who rates the stock overweight, said investors who are buying due to near-term weakness “should not expect the stock to continue to decline.” “We still see a bright future for Microsoft with continued growth prospects in large areas of IT spending, the ability to further monetize its strong position in multiple end markets, and a financial picture that continues to demonstrate sustained margin expansion,” Turin said. “While we recognize the stock is trading near all-time highs, we believe this is justified given the company’s early lead in AI and its position as a strong incumbent in a tough market that is favorable, especially in the current environment.”
Analysts overwhelmingly say Microsoft shares should be bought after post-earnings dip, AI buzz remains
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