There was some good news this morning for Microsoft (NASDAQ:MSFT), whose wide range of ventures tends to insulate it from most downturns. In fact, a new report from Bank of America suggests that Microsoft’s fortunes are looking up in the near term and will likely see not only good news for its latest earnings report but also for the rest of the year. Microsoft was up fractionally with this news.
The word came from Bank of America analyst Brad Sills, who currently has a Buy rating on Microsoft, along with a $405 price target. The recent word suggests that Microsoft’s Azure is seeing “sustained, healthy” workloads, which in turn should provide a decent bump to Microsoft’s bottom line for the quarter. With AI subscriptions to Azure on the rise, along with rising use of Copilot and declining headwinds connected to PC use—the PC may well be making a comeback—that all spells at least reasonably good news for Microsoft in the short- and medium-term.
In fact, it gets better for Microsoft, as it’s about to land a cool billion-dollar payday from one of its biggest rivals – Amazon (NASDAQ:AMZN). Amazon is putting over $1 billion into licensing Microsoft 365 products for a million of its own workers. While Amazon already was a Microsoft customer, focused mainly on standard Microsoft Office software, Amazon will make the jump to Microsoft’s cloud-based systems. It was a move Amazon mulled over for some time, particularly given that Microsoft is a major Amazon competitor in cloud-based systems.
Is Microsoft a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 30 Buys and four Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average MSFT price target of $398.28 per share implies 19.7% upside potential.
