The latest word out of Oppenheimer proved welcome for tech giant Microsoft (NASDAQ:MSFT) and its investors. In fact, Microsoft ticked upward fractionally in Friday afternoon’s trading after analysts Timothy Horan and Maxwell Holm recently carried out a major analysis on Microsoft and liked what they found. They noted that Microsoft—thanks to its resources, prominence in PC hardware, and partnership with OpenAI—has now become the leading artificial intelligence platform. The partnership gives both sides the necessary resources and agility to build and put into use the “best AI model” around.
OpenAI’s GPT-4o is already leading the market, and reports suggest that GPT-5 will be available before the year is out. It’s also worth noting that Timothy Horan has so far enjoyed a 92% success rate on MSFT stock, with an average return of 29.19% per rating.
A Fatal Catch
Yet, even as Microsoft leads the way in AI operations and turned in a pretty strong third quarter based on its latest earnings reports, the news wasn’t nearly so good for workers in the Azure cloud and mixed reality divisions. These two saw between 1,000 and 1,500 layoffs as Microsoft blamed the growth of AI for making the firings necessary. This move was regarded as “tone deaf” by some observers, and such a response isn’t at all surprising.
With Microsoft also laying off around 10,000 employees just a year prior, again citing AI as the reason, it’s enough to wonder if Microsoft isn’t deliberately making the conditions under which it can no longer keep employees.
Is Microsoft a 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 31.92% rally in its share price over the past year, the average MSFT price target of $491.90 per share implies 15.52% upside potential.
