Citi opens ‘positive catalyst watch’ on Microsoft into ‘catalyst path’

Citi opened a “90-day positive catalyst watch” on Microsoft while keeping a Buy rating on the shares with a $420 price target. The analyst sees the stock “trading higher into year end with a rich catalyst path ahead.” Microsoft shares have lagged on a relative basis post the July quarter earnings report, the analyst tells investors in a research note. However, the firm now sees an “interesting catalyst path for the stock” through year-end with several artificial intelligence events. In addition, while still early, the shares could trade well into the fiscal Q1 earnings report with a stabilizing PC market, better Azure inputs, and a revenue acceleration trend, says Citi. It believes dynamics may continue to emerge “as a potential third leg of the MSFT growth story” with accelerating growth driven by consolidation and AI tailwinds.