The Microsoft Corporation (NASDAQ:MSFT) stock price hit a ceiling this week after posting impressive gains on Friday, flying to a fresh high and giving the Dow Jones Industrial Average a much-needed boost. Tuesday was a much different story, however, as Microsoft slipped into the red again after bouncing around on Monday. At least one firm upgraded Microsoft stock today, while two others raised their price targets following last week’s earnings report.
Microsoft stock heading for triple digits
Piper Jaffray analyst Alex Zukin said in a post-earnings note that he now sees the Microsoft stock price heading to triple digits within the next 12 months. He reiterated his Overweight rating and raised his price target from $90 to $100 because he says all three of the company’s operational business units are “firing on all cylinders.” He said the company paired the strength across all three of its divisions with “incremental leverage.”
Oppenheimer analyst Timothy Horan said in a note on Monday that he has boosted his Microsoft stock price target from $80 to $92 and reiterated his Outperform rating. He said Azure and Office 365 drove the company’s results, and gross margins expanded 180 points sequentially to reach 35.8% Cloud is now 31% of the company’s revenue after rising 38% year over year.
Azure alone grew 90% year over year, which is double the growth rate of Amazon Web Services, he added. He notes that Microsoft is uniquely positioned to integrate its legacy IT products with the cloud, thus increasing demand for both. He sees Microsoft as being best positioned for enterprise cloud adoption. Further, he said that Azure Stack has proven that Microsoft is able to successfully execute its hybrid cloud strategy, driven by new product growth as legacy products continue to hold strong.
Microsoft stock upgraded by Argus
Today Argus analyst Joseph Bonner upgraded Microsoft stock from Hold to Buy and set his price target at $95. He noted that the company is still trailing Amazon, but he still believes it can turn a profit from the shift toward the cloud. He said Gartner data shows Microsoft with only a 7% share of the public cloud market, which is far behind Amazon but still higher than competitors. Like Horan, he feels that the company’s many long-term business relationships can be leveraged as it shifts toward commercial cloud revenues.
The Microsoft stock price declined by as much as 0.46% to $83.49 during regular trading hours on Tuesday, threatening to erase the strong gain it posted after last week’s earnings report. The stock was trading in the $79 per share range in the hours leading up to the print.