Tech giant Microsoft (NASDAQ:MSFT) has been a massive operation for decades. When it basically became the face of the PC market via Windows, that was all most needed to know. Now, with AI on the rise, can it hold its prominence? New Street Research thinks so, and that gave Microsoft a fractional boost in Monday afternoon’s trading.
Analyst Pierre Ferragu started coverage on Microsoft and, not surprisingly, started it at a Buy. And what a Buy, too; Ferragu looks for profit gains “in the low teens for years to come” and established a price target of $570 per share. It’s worth noting that, so far, Ferragu has a 64% success rate with an average return of 19.3% per rating.
Throw in its current dominance of the PC market with its likely dominance of future markets thanks to its partnership with OpenAI, and that puts Microsoft on track for gains. Even if AI turns out to be a flash in the pan—which is unlikely given its sheer potential, even if the actual results aren’t really living up to that potential yet—Microsoft still has other options that will keep it moving along.
The Winner of the Summer Game Show Field
An example of its other options includes the video game sector. With its summer game show event, which concluded just yesterday, and a panoply of new trailers revealing its near-term future, analyst Michael Pachter at Wedbush Securities declared Microsoft top of the heap in the summer gaming showcase field.
Pachter noted that the showcase “highlighted the publishing might of Microsoft at present after a series of high-profile acquisitions.” Given the sheer number of trailers that came out of that show, it’s not surprising that Pachter would hold that viewpoint, especially considering how some felt that the Sony (NYSE:SONY) equivalent was a bit disappointing.
Is Microsoft Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 32 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 29.41% rally in its share price over the past year, the average MSFT price target of $493.56 per share implies 15.87% upside potential.
