'First Time In 2 Decades Microsoft Is Not Playing From Behind In Emerging Tech Trend' - Analyst

Stifel analyst Brad R. Reback reiterated a Buy rating on Microsoft Corp MSFT with a price target of $390.

Earlier this week, the analyst spent time with several members of MSFT’s financial management organization that covered almost all the company’s product portfolio. 

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In line with last week’s earnings call, the conversations centered on the significant opportunity ahead of Microsoft to leverage its AI leadership position to profitably accelerate share gains across the company’s numerous productivity, security, and consumer platforms.

Reback highlighted that this is the first time in over two decades that the company is not playing from behind in an emerging tech trend. 

Given how well MSFT has been able to close the gap in Cloud over the last decade, the analyst eagerly awaits a solid mix of AI-driven pricing and volume gains that should begin to become increasingly evident in coming quarters. 

Reback expects the coming AI cycle to allow Microsoft to sustain double-digit revenue and profitability growth for years to come.

In October, Microsoft reported fiscal first-quarter revenue growth of 13% year-over-year to $56.5 billion, which beat the consensus estimate of $51.4 billion. The tech giant reported quarterly earnings of $2.99 per share, up 27% on a year-over-year basis.

Price Action: Microsoft shares traded higher by 1.98% at $344.76 on the last check Wednesday.