Microsoft’s Stock Takes a Hit: What Investors Should Know
Redmond, Washington-based Microsoft Corporation (MSFT) plays a significant role in the computer industry. The company develops and supports software, services, devices, and solutions, boasting a market cap of $3.1 trillion. Microsoft provides applications, cloud storage, and security solutions to a global customer base.
Recent Performance Compared to Market Trends
Over the past year, shares of this tech giant have lagged behind the broader market. MSFT has increased by 14.4%, while the S&P 500 Index ($SPX) has surged nearly 35.5%. In the current year, MSFT stock has gained 12.5%, whereas the S&P 500 has risen by 25.5% year-to-date (YTD).
Comparison with Other Technology Investments
When focusing on the Technology Select Sector SPDR Fund (XLK), MSFT’s underperformance appears less significant. The fund has gained approximately 31.6% in the past year, with a YTD growth of 22.7%, outpacing MSFT’s returns during the same period.
Current Stock Status and Financial Highlights
As of now, MSFT’s stock price is 9.7% below its all-time high of $468.35 reached in July. This decline has been influenced by the CrowdStrike outage and mixed signals from the Q1 earnings report. Additionally, increased capital spending on AI infrastructure is concerning analysts.
On October 30, Microsoft shares slightly rose after releasing its Q1 results. The earnings per share (EPS) of $3.30 surpassed Wall Street’s expectations of $3.08, while revenue reached $65.6 billion, exceeding forecasts of $64.4 billion.
Future Projections
For the current fiscal year ending in June 2025, analysts predict MSFT’s EPS will grow by 9.7% to $12.94 on a diluted basis. The company has a strong record of exceeding earnings expectations, having beaten consensus estimates in each of the last four quarters.
Analyst Ratings Overview
Among the 40 analysts covering MSFT, the consensus rating is a “Strong Buy,” supported by 34 “Strong Buy” ratings, three “Moderate Buys,” and three “Holds.” This sentiment has slightly shifted from two months ago, when 36 analysts suggested a “Strong Buy.”
Price Target Insights
On November 11, Loop Capital Markets analyst Yun Kim reaffirmed a “Buy” rating on MSFT, setting a price target of $500, which implies a potential upside of 18.2% from current levels. The average price target among analysts is $504.45, suggesting a 19.2% increase potential. Additionally, the highest target of $600 indicates a remarkable upside potential of 41.8%.
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On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
