Market Overview

Microsoft's Tailwinds Outnumber Headwinds, Analyst Says

Share:
Microsoft's Tailwinds Outnumber Headwinds, Analyst Says

Microsoft Corporation (NASDAQ: MSFT) boasts four compelling tailwinds that could set the tone for the next decade, according to Piper Sandler.

The Analyst

Brent Bracelin maintains an Overweight rating on Microsoft with a price target lifted from $158 to $190.

The Thesis

2020 will be a "defining year" for Microsoft as it is backed by $67 billion in net cash and investments which can be used to bolster its business through M&A deals, Bracelin wrote in a note. In addition, the company can count on another $200 billion in operating cash flow over the next three years to further "enhance its position as a trusted enabler" of the digital enterprise market.

Specifically, Microsoft could see upside from four catalysts, including acceleration in cloud revenue from 8.5% over the past decade to 12% CAGR over the next three years, growth in developer popularity through recently acquired GitHub and Visual Studio Code and a strong outlook from gaming that will benefit from the first major console refresh in seven years.

On the other hand, Bracelin said investors may want to closely monitor two potential headwinds, including shortages of Intel CPUs which could impact 21% of sales related to Windows and Surface devices, and end of life or support for Windows 7, Server 2008, and SQL.

Microsoft (NASDAQ: MSFT) Stock

Shares of Microsoft were up 0.27% at $166.15 at time of publication Wednesday.

Related Links

Cramer Says Microsoft's Green Initiative A 'Shocking Paradigm Shift'

Amazon Urges Court To Halt Progress On Microsoft's JEDI Contract With The Pentagon

Latest Ratings for MSFT

DateFirmActionFromTo
Apr 2020Raymond JamesMaintainsStrong Buy
Mar 2020CitigroupMaintainsNeutral
Mar 2020Piper SandlerMaintainsOverweight

View More Analyst Ratings for MSFT
View the Latest Analyst Ratings

 

Related Articles (MSFT)

View Comments and Join the Discussion!

Posted-In: Brent Bracelin cloud Piper SandlerAnalyst Color Price Target Reiteration Analyst Ratings Tech Best of Benzinga

Latest Ratings

StockFirmActionPT
XPOJP MorganMaintains84.0
UPSJP MorganMaintains113.0
UNPJP MorganMaintains163.0
NSCJP MorganMaintains189.0
MCHPJP MorganMaintains100.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com