Microsoft
stock has been rising on strong earnings and product announcements, giving one analyst reason to take a small step back in his bullish view.
Citi
analyst Tyler Radke closed his positive catalyst watch for
Microsoft
(ticker: MSFT) on Friday while maintaining his Buy rating and $432 price target on the stock.
Radke wrote in a research note that while he still remains positive on the company’s pace of product innovation around generative artificial intelligence, many of the potential positive catalysts for the stock that excited him already have come and gone.
“With the stock’s notable outperformance over the last 2-3 months … we are pounding the table with a little less vigor and closing our positive catalyst watch,” Radke said.
One positive driver for the stock was fiscal first-quarter earnings reported on Oct. 24.
Microsoft
posted better-than-expected earnings and revenue while also reporting that its Azure cloud business grew significantly in the quarter.
Wall Street also been excited about new launches from Microsoft, including Copilot, an AI-based companion for the company’s suite of apps like PowerPoint and Excel.
“Copilot continues to be a focus going forward as hundreds of organizations wait in line for various use cases with AI technology,” Wedbush analyst Dan Ives wrote in a note Wednesday in which he raised his price target on the shares to $425 from $400 and maintained his Outperform rating.
Microsoft also recently unveiled its Azure Maia AI Accelerator, a new AI chip.
Radke said Microsoft remains Citi’s preferred megacap name as the firm continues to see “a durable multi-year product cycle driving sustained double-digit top-line/bottom line growth.”
Shares of Microsoft were down 0.1% in premarket trading Friday to $375.86. Coming into the session, the stock has jumped 57% this year. Futures on the
Dow Jones Industrial Average,
S&P 500,
and
Nasdaq
each were rising about 0.2%.
Write to Angela Palumbo at [email protected]
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