Stock price when the opinion was issued
Shares are back to July 2024. Will this be closer to $300 or $500? The easy answer is $500. $300 would mean a lot of fundamental concerns on the macro side of the market. Look for guidance ahead. Are they still on schedule to spend $13 billion this year? And what will they get in return for that? Their last Q4 revealed that their AI business surprisingly surpassed their revenue run rate of $13 billion, which was a lot sooner. Companies like this are spending alot, but they are making money back in AI.
MSFT recently reported a 170% increase in its AI and cloud services segment. It is a key player in the space and a solid company to own. It has been prudently using some of its cash reserves to buy back shares and retire debt. It supports a ROE of 34%. We recommend setting a stop-loss at $340, looking to achieve $505 — upside potential of 29%. Yield 0.8%
(Analysts’ price target is $504.89)