Microsoft’s (NASDAQ:MSFT) stock took a dip at the time of writing as investors raised eyebrows at the company’s increased AI spending. However, industry analysts are seeing a silver lining in this cloud, praising the tech giant’s compelling momentum in the AI sphere. Analyst Dan Ives from Wedbush Securities sees the spending hike as a calculated move, asserting that Fiscal Year 2025 will be a pivotal year for AI growth. He has also ratcheted up his price target for Microsoft to $400, pointing out that the firm could potentially tap into half of its global installed base over the next three years thanks to the fusion of AI and cloud.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Furthermore, despite some concern about PC performance, Microsoft’s fiscal Q1 guidance remains robust, according to Ives, especially due to Azure’s resilience. The firm’s Q1 sales are projected to fall within the $53.8B to $54.8B range. Analyst Bradley Sills from Bank of America, who maintains a ‘Buy’ rating and a $405 price target on Microsoft, endorses the increased spending for fiscal 2024, attributing it to the enticing opportunities lying ahead. He lauded Microsoft’s ability to manage a marginal expansion amidst ramping costs, reflecting the company’s impressive operational and expense management scale.
Is Microsoft Stock a Buy, Sell, or Hold?
Overall, analysts have a Strong Buy consensus rating on MSFT stock based on 31 Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic above. Nevertheless, the average price target of $378.47 per share implies 13.23% upside potential.
