Qualys falls after Morgan Stanley details Microsoft partnership loss

Morgan Stanley says Microsoft (MSFT) recently announced plans to end its original equipment manufacturer partnership with Qualys (QLYS) as the default provider of vulnerability scanning within Microsoft Defender, effective May 1. With Microsoft being one of Qualys’ largest customers and partners, the firm sees sales risks as “potentially material.” Morgan Stanley believes Microsoft represents between 5%-10% of Qualys revenue, presenting material risk to sales as existing Defender customers migrate. It feels the recent Microsoft announcement adds to its view of mounting topline pressures for Qualys. The firm keeps an Underweight rating on the shares with a $150 price target. The stock in early trading is down 6% to $177.13.