Microsoft's Growth Momentum: Morgan Stanley Touts Defensive Position, Market Share Gains, and Peer Valuation Advantage

Morgan Stanley analyst Keith Weiss reiterates an Overweight rating on Microsoft Corp MSFT with a $307 price target.
Weiss highlights that the MS AlphaWise CIO Survey suggests stable IT spending and favorable Microsoft-specific fundamentals.
The analyst thinks that the stabilization in 2023 spending expectations is encouraging, suggesting CIOs worked through a critical enterprise budget planning period without the data seeing a material deterioration.
Additionally, he flags several forward-looking indicators in the CIO survey that support Microsoft's strong relative positioning if CY23 budgets come under further pressure.
While there remain indicators that Microsoft is not immune to the weaker IT spending environment (in particular recent elevated levels of Cloud spend optimization), Weiss thinks that the evidence highlighted in the survey work suggests that favorable near-term consolidation trends remain and a further improvement in Microsoft's positioning against longer-term spending priorities.
To Keith, these factors, combined with a valuation still at a discount to peers, set Microsoft up as a defensive name with share gain momentum in attractive markets supporting its stable growth.
Last month, the stock gained 12%, beating the broader index SPDR S&P 500 SPY at just 1%. The stock gained 20% YTD beating the broader index at 7%.
Price Action: MSFT shares traded higher by 2.42% at $291.23 on the previous check Thursday.

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