Tech giant Microsoft (NASDAQ:MSFT) is Wells Fargo’s top software player for 2024. Michael Turrin of Wells Fargo reiterated a Buy recommendation on MSFT stock on December 20. Further, his price target of $425 implies 14.67% upside potential from current levels.
Increased Software Spending Should Support MSFT Stock
Referring to the year-end Chief Information Officer (CIO) survey, Turrin highlighted that over 90% of respondents plan to boost their technology spending in 2024, with Microsoft poised as the primary beneficiary.
Jefferies analyst Brent Thill shared similar views, noting that CIOs anticipate an increase in software budgets for 2024. According to Thill’s survey, CIOs expect that their Software budgets will grow by 3.4% in 2024, higher than the increase of 2.3% in 2023. The analyst added that 58% of CIOs anticipate higher expenditures on Amazon’s (NASDAQ:AMZN) AWS, while 48% plan to increase their spending on Microsoft during the same period. Thill is bullish about MSFT’s prospects, while his price target of $400 implies 7.93% upside potential from current levels.
While Turrin and Thill are optimistic about MSFT’s prospects, let’s look at what the consensus rating indicates.
What is the Forecast for Microsoft Stock?
Microsoft’s focus on rapidly infusing Artificial Intelligence (AI) across products is positively impacting its financials, which, in turn, has boosted its share price. Further, the company’s dominant positioning in the cloud segment and focus on launching new products augur well for growth. This is reflected in analysts’ positive outlook.
Microsoft stock sports a Strong Buy consensus rating based on 36 Buy and one Hold recommendations. Further, analysts’ average price target of $422.91 implies 14.11% upside potential from current levels.
