Overnight Microsoft (NASDAQ: MSFT) received a rather uncommon price target: not applicable. Specifically, KeyBanc’s Jackson Ader removed the technology giant’s previous target of $575 due to heightened sector and overall uncertainty.
Furthermore, Ader downgraded MSFT stock’s rating from ‘overweight’ – ‘buy’ – to ‘sector weight’ – ‘neutral’ – explaining that the ongoing economic situation is reducing flexibility while increasing pressures on the technology giant’s margins.
Microsoft has been generously spending on artificial intelligence (AI) technology and infrastructure, putting the company under pressure. On the one hand, the profitability of AI in the foreseeable future remains questionable, and on the other hand, fears that data centers have become a global bubble have been growing.
Ader also reflected on Azure, an aspect of Microsoft’s business that has been closely monitored in recent years, and one that is likely to take a major hit should the macroeconomic factors grow even worse, when he downgraded the MSFT outlook.
Capex spend is being called into serious question, and Copliot revenue and demand have not lived up to our expectations. What was a win-win just over 12 months ago has flipped into a risk-risk. Microsoft has very few options that have positive outcomes here, in our view.
Microsoft hit with deluge of price target downgrades despite bullish outlook
On April 16, other analyst revisions were more assertive when predicting where Microsoft stock is headed. MSFT shares received three prominent revisions. Though all three saw price target downgrades – Morgan Stanley (NYSE: MS) abandoned $530 for $472, Mizuho replaced $500 for $475, and BMO Capital swapped $490 for $470 – they also all stuck to their previous ‘buy’ ratings.
Shortly after KeyBanc, BNP Paribas followed the April 16 example by opting for a $483 forecast instead of $500 and an ‘outperform’ rating.
The remaining April revision adhered to a similar pattern, though with the rapidly changing macroeconomic situation, it is uncertain whether they will be changed soon.
MSFT stock market performance
Meanwhile, Microsoft shares themselves have been struggling in the 2025 market, falling 11.47% from their January 2 price of $421.50 to their press time price of $373.17.
On the flip side, the lowest recent MSFT stock price target would, if met, constitute a 25.95% upside from the April 17 values, strongly indicating that Wall Street has remained adamantly bullish through the turmoil.
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