Technology giant Microsoft (NASDAQ: MSFT) is the center of a major regulatory issue, the outcome of which is likely to impact the company’s stock.
The United States Federal Trade Commission (FTC) has reportedly opened an antitrust investigation into Microsoft, focusing on the company’s software licensing and cloud computing businesses.
Sources close to the matter indicate the probe will examine Microsoft’s practices related to cybersecurity and artificial intelligence (AI) products.
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Despite this news, Microsoft’s share price has remained largely unaffected, staying in the green in the short term. As of press time, MSFT was trading at $423, with modest gains of less than 0.1% in the past 24 hours. On the weekly chart, MSFT has gained almost 2%.
This price movement is welcomed, considering that Microsoft’s technical outlook has raised concerns, having formed its second “death cross” in a month.
AI predicts MSFT stock price for 2025
With the antitrust investigation likely to unfold over the coming year, Finbod consulted OpenAI’s ChatGPT-4o to determine how Microsoft stock might trade by the end of 2025.
Microsoft’s stock will be influenced by the ongoing antitrust investigation in 2025. If penalties are imposed, this could hurt its valuation, but a successful defense may boost investor confidence.
Growth in cloud computing, AI through Azure and OpenAI, and rising demand for cybersecurity will drive revenue and help mitigate regulatory concerns. Broader market conditions, including interest rates and economic growth, will also impact its performance.
Regarding specific price targets, ChatGPT noted that at $423, Microsoft’s stock is trading at high multiples, reflecting its growth potential.
Assuming stable regulatory conditions and continued growth, a conservative annual increase of 10-15% could see MSFT reach between $465 and $490 by 2025. In a more optimistic scenario, with strong AI and cloud growth and favorable regulatory outcomes, the stock could surpass $500. However, in a bearish case, regulatory penalties or slower growth in key areas might push the price back to $375 to $400.
Analysts’ outlook on MSFT stock
Meanwhile, Wall Street analysts have also shared their views on MSFT in light of the new legal battle. In a note on November 29, Wedbush Securities analyst Dan Ives dismissed the potential impact of the antitrust probe on the equity.
He views the suit as unlikely to have long-term effects and expects it to fade once a new FTC chair is appointed in January. Ives believes big tech will face minor setbacks from legal challenges but remains bullish on the sector’s growth, particularly in AI, through 2025.
Ives maintained an ‘Outperform’ rating on Microsoft with a $550 target. TD Cowen analyst Derrick Wood also shared this bullish outlook, maintaining a ‘Buy’ rating with a price target of $475.
RBC Capital, UBS, Daiwa Securities, and President Capital have rated Microsoft shares as ‘Buy,’ with price targets ranging from $476 to $520.
In summary, despite the antitrust investigation, Microsoft’s stock remains bullish, with analysts optimistic about its growth. While regulatory challenges may cause short-term volatility, the stock has the potential of breaching the $500 resistance.
Featured image via Shutterstock
