One of the most dominant and longstanding names in tech, Microsoft (NASDAQ: MSFT), has had quite a turbulent year. Although price action in 2024 was marked by numerous sudden surges and equally sudden drops, on a year-to-date (YTD) basis, Microsoft stock has seen prices increase by 17.94%.
On October 30, the company held its Q1 FY2025 earnings call. Despite it being the company’s eighth consecutive quarter with an earnings beat, Microsoft shares saw prices recede by as much as 6.5% in the immediate aftermath.
The drop proved to be temporary, however — by December 17, MSFT stock saw gains of 11.84%. Then, on December 18 prices declined by 3.79% in tandem with the wider market pullback that wiped out roughly $1.5 trillion in value, seen on account of the Federal Open Market Committee (FOMC) meeting which entailed disappointing inflation outlooks.
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At press time, Microsoft stock was trading at $441.31, with year-to-date (YTD) returns standing at 17.36%.
Wall Street, however, didn’t seem to particularly mind the drop, at least as the recent news relates to Microsoft. Analysts are quite bullish on the share price — and three equity researchers from premier firms have recently revised their price targets for Microsoft stock.
Analysts see plenty of upside for Microsoft stock
Karl Keirstead, a large-cap software equity researcher at UBS, raised his price target on Microsoft stock from $500 to $525, reissuing a prior ‘Buy’ rating on December 18. If met, his forecast would represent an 18.96% upside from the current MSFT share price.
In a note shared with investors, he stated that UBS is “comfortable that Microsoft is at the highest quality end of the customer and workload spectrum,’’ and their firm is not seeing any clear evidence of over-build among the smaller GPU cloud providers.
The analyst did note, however, that weariness regarding high capital expenditures and uncertainty about how the OpenAI relationship will evolve are risk factors when it comes to investor sentiment.
On the same day, Stifel Nicolaus enterprise software analyst Brad Reback likewise reiterated an earlier ‘Buy’ rating, while increasing his price forecast from $475 to $515 — equating to a 16.69% upside. Reback opined that Microsoft would most likely see “stabilizing-to-modestly accelerating top-line growth rates, relatively attractive mid-year multiples,’’ as well as tailwinds from solid economic growth in 2025.
Many of the same sentiments were echoed earlier by Gregg Moskowitz, a renowned Mizuho analyst. On December 13, he set a price target of $510 — reissuing a prior ‘Outperform’ rating that had a $480 price target.
Expounding on why he sees a 15.56% upside in the cards for MSFT shares, Moskowitz noted that “the industry’s risk/reward is more balanced entering 2025, but still attractive overall.’’
Featured image via Shutterstock
