Microsoft Says SolarWinds Hackers Accessed Its Source Code; Street Stays Bullish

Microsoft, a customer of SolarWinds, disclosed that hackers viewed its source code in the cyberattack that impacted Orion platform users.

The cyberattack which was detected in December 2020 impacted several US government agencies and companies using SolarWinds’ Orion platform, in which hackers inserted a malware.

In a blog providing an update on Microsoft’s (MSFT) ongoing internal investigation into the cyberattack (which the company calls Solorigate), the company revealed that it detected unusual activity in a small number of internal accounts and found that one account was used to access its source code in a number of source code repositories. That said, the account did not have permissions to modify any code or engineering systems and the company’s investigation confirmed that no changes were made. Microsoft stated that these accounts were investigated and remediated.

The company had earlier reported that it detected malicious applications by SolarWinds in its environment, which were isolated and removed.

However, further investigation brought into light attempted activities beyond the presence of a malicious SolarWinds code in Microsoft’s environment. The tech giant confirmed that such activity has not put at risk the security of its services or any customer data. Also, the company found no indications of its systems being used to attack others.

On Dec. 30, Wedbush analyst Daniel Ives reiterated a Buy rating on Microsoft stock with a price target of $260 (upside potential of 17.3%). Ives expects the company to surpass earnings expectations for its December quarter as the remote working environment is accelerating the shift to cloud applications.

In a note to investors, the analyst commented “While we have seen the momentum of this backdrop in the last few quarters, we believe deal flow looks strong heading into the rest of FY21 as we estimate that Microsoft is still only ~35% through penetrating its unparalleled installed base on the cloud transition.” (See MSFT stock analysis on TipRanks)

“To this point, we believe Azure’s cloud momentum is still in its early days of playing out within the company’s massive installed base and the Office 365 transition for both consumer/enterprise is providing growth tailwinds over the next few years,” he added.

Currently, Microsoft scores a Strong Buy analyst consensus based on 23 unanimous Buys. The average price target of $250.76 indicates upside potential of 12.7% from current levels. Shares gained 41% in 2020.