Microsoft’s (MSFT) stock earnings are due on April 29, and right now that date carries more weight than any standard quarterly report. MSFT has climbed about 20% off its March lows and trades around $427 at the time of writing. With the earnings report tomorrow, some Wall Street analysts are bullish, suggesting a stock breakout is looming.
Evercore ISI chief technical analyst Rich Ross said in a new note that Microsoft has one of the “best acting charts” in the tech space right now, noting that the stock has reclaimed its 50-day moving average with “authority.” He added that Microsoft can be “owned both fundamentally and technically,” given the recent pullback to a long-term support level (see chart below) that has held since the European financial crisis.
In addition, Wedbush tech analyst Dan Ives said, “The Street continues to underestimate the Azure growth story in our view with an AI-driven shift about taking place in Redmond heading into the back half of the fiscal year, making Microsoft one of our favorite large cap tech names to own over the coming years.” Most analysts agree on Microsoft’s growth potential, with Bernstein leading with a price target of $645. Current analyst price targets range from $500 to $645, all significantly above the current market price of $428.
Alternatively, Guggenheim’s John DiFucci thinks fiscal Q3 could turn into a “mixed bag” for MSFT, with Microsoft Azure’s growth risk sitting at the center of his concerns. The broader Microsoft earnings forecast from Wall Street stays bullish, and the MSFT stock price target consensus also looks strong, but DiFucci thinks the setup is more complicated than it appears. Wall Street expects Azure to post 37% to 38% constant-currency revenue growth in fiscal Q3, and DiFucci thinks that bar is too high.
However, with the technical setup improving and concerns about the pace of Azure growth and capital expenditure plans well known, a positive shift in sentiment could emerge. Therefore, the stock is one of the more underrated options on Wall Street, especially among Magnificent 7 rivals.
