Microsoft Corporation (NASDAQ:MSFT)’s income has historically depended on PC sales, so now that the PC market is in decline, investors and analysts are starting to have very negative views on the company. However, analysts at Morgan Stanley say this means there are some areas in which the tech giant could surprise us. The company did beat expectations for its first-quarter report, after all.

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Morgan Stanley analysts upgraded shares of Microsoft Corporation (NASDAQ:MSFT) last week, and this week they updated their report to investors. They concentrated on four of the most common areas of investor pushback to last week’s report.

First, they said investors pushed back against last week’s report by saying that tough corporate numbers mean that PCs continue to decline. Investors are concerned because enterprises are only about 60 percent through the migration from Windows XP to Windows 7. However, Morgan Stanley analysts said they’ve found through their surveys that 22 percent of CIOs plan to refresh their PCs this year and 23 percent of them plan to do so next year.

Second they said any upside opportunities for revenue present risks to Microsoft’s gross margins. The analysts said even through success in tablets, smartphones and the Xbox 720 could pressure the company’s gross margin percentage, those upsides are not in their model and would just add dollars and earnings per share to Microsoft’s gross margins.

Third, investors said they were concerned that the weakness Microsoft Corporation (NASDAQ:MSFT) is see in its Windows division will spread to MBD. Morgan Stanley analysts said even though MBD customer revenues have taken most of the impact of weak PC sales, they noted that “a more durable corporate revenue line actually grew 10 percent” during the third quarter, despite the impact of a rising percentage of subscription revenues.

And finally, investors were worried that Microsoft would cut OEM fees in order to spur demand for Windows 8. Morgan Stanley analysts said this is a common practice for the company, but they don’t expect to see an across-the-board price cut. Instead, they expect it to be targeted and specialized, which “likely yields a more additive impact to forecasts.”