Microsoft (MSFT) stock was up on Friday following reports that the tech giant placed strict profit targets on its Xbox division. According to these reports, Microsoft wants Xbox to produce profit margins of 30%, which is much higher than the industry average of 17.1% in 2024.
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Microsoft’s high demands for Xbox are reportedly behind many of the major changes announced by the business over the past couple of years. Among these are the recent wave of layoffs, the focus on Xbox Game Pass subscriptions, and the decision to start publishing games on Sony’s (SONY) PlayStation platform, instead of keeping them as Xbox exclusives.
Microsoft’s high profit margin expectations appear to have caused internal conflict at Xbox. Xbox head Phil Spencer said at a media event today that the game publisher wants to nurture and protect creative teams that want to take risks. He called it “the most brave thing a team can do.” However, the Xbox leader noted that the company doesn’t “always succeed at that.” A prime example of this is Tango Gameworks, the studio behind the 2023 hit Hi-Fi Rush. Despite that game’s success, Xbox shuttered the studio, which was acquired by Korean publisher Krafton afterward.
Microsoft Stock Movement Today
Microsoft stock was up 0.46% on Friday, extending a 24.18% year-to-date rally. The shares have also climbed 21.58% over the past 12 months. A large portion of MSFT stock’s gains has come from the company’s AI endeavors alongside the boom that sector experienced in 2025.
Is Microsoft Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Microsoft is Strong Buy, based on 32 Buy ratings over the past three months. With that comes an average MSFT stock price target of $630.28, representing a potential 20.52% upside for the shares.
