Wall Street closes at a record for the first time since end of January
Investing.com - Baird lowered its price target on Microsoft stock (NASDAQ:MSFT) to $500 from $540 while maintaining an Outperform rating, the firm said Tuesday.
The analyst cited mixed-to-negative sentiment on Microsoft’s software exposure and competitive concerns around Copilot, particularly amid accelerating innovation from AI Labs.
Baird said it views the setup favorably heading into the company’s fiscal third-quarter earnings report scheduled for April 29. The firm expects continued Copilot traction, strong Azure trends and earnings-per-share growth could address some investor concerns.
The analyst noted many investors are waiting for Azure acceleration before turning more positive, which is unlikely in the upcoming quarter.
Baird said the current valuation is attractive for a mid-teens percentage revenue and EPS grower with global enterprise reach, product stickiness and growing AI opportunities. The company trades at a P/E ratio of 24.5 with a PEG ratio of 0.85, and InvestingPro analysis indicates Microsoft is currently undervalued relative to its Fair Value. For deeper insights, investors can access Microsoft’s comprehensive Pro Research Report, one of 1,400+ available on InvestingPro, which transforms complex data into actionable intelligence.
In other recent news, Microsoft is reportedly in the final stages of securing a long-term memory supply agreement with SK Hynix. This deal is expected to ensure Microsoft’s access to memory components for the next five years, addressing concerns over component availability for data center expansion. The agreement is said to include provisions on minimum prices to safeguard the manufacturer against potential declines in global memory prices. Additionally, KeyBanc has reiterated an Overweight rating on Microsoft’s stock, highlighting the company’s strong performance in meeting or exceeding expectations 90% of the time. This rating comes with a price target of $600.00. These developments indicate ongoing strategic moves by Microsoft to strengthen its supply chain and maintain its market position.
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