U.S. President Donald Trump said on Monday that Microsoft (MSFT) is in discussions to acquire the U.S. operations of TikTok, the popular video-sharing app owned by the Chinese tech giant ByteDance. He also expressed interest in seeing a bidding war for the app, as several parties are reportedly vying to acquire it.
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Investors should note that this is not the first time Microsoft has been associated with a potential acquisition of TikTok. Back in 2020, during Trump’s first term, Microsoft was among the contenders, but the discussions ultimately ended without a deal.
While the outcome of the latest discussions remains uncertain, the potential acquisition could be highly important to MSFT. This is because TikTok’s vast amount of user data and engagement metrics could boost Microsoft’s advertising capabilities and provide valuable insights for targeted marketing.
MSFT Interest Rises Post TikTok Ban
Microsoft’s interest in TikTok comes after the app’s brief shutdown in the U.S. earlier this month, prompted by a law requiring ByteDance to sell off its U.S. operations for national security reasons. However, President Trump delayed the ban’s enforcement, giving TikTok 75 days to secure a deal with an American entity.
Trump had previously suggested that the U.S. should hold a 50% stake in any joint venture. This would ensure TikTok remains available for its 170 million American users while limiting Chinese influence on the platform.
In addition to Microsoft, other potential buyers include AI startup Perplexity and billionaire Frank McCourt.
Is Microsoft a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 27 Buys and two Holds assigned in the past three months. At $509.42, the average Microsoft price target implies a 17.23% upside potential. Shares of the company have gained 2% over the past three months.
