Microsoft price target lowered to $540 from $548 at Morgan Stanley

Morgan Stanley lowered the firm’s price target on Microsoft (MSFT) to $540 from $548 and keeps an Overweight rating on the shares. While noting that investor sentiment has shifted negative as a “wall of worry” around gross margins, capex, GenAI monetization and the OpenAI relationship builds, the firm argues that share underperformance and negative investor sentiment create “an attractive setup for the stock to outperform against a stable-to-improving demand backdrop.” Meeting buy-side expectations for 32%-33% constant currency Azure growth in Q2 and “instilling more confidence” in a second half acceleration remain the key catalysts for Microsoft shares, the analyst adds in a preview.