Microsoft (MSFT) received downward price target revisions from at least three Wall Street analysts ahead of the tech giant's fiscal fourth-quarter results later this month, while they maintained their respective bullish ratings. At the time of writing, MSFT stock traded marginally in the green during Wednesday's premarket. Wells Fargo cited concerns surrounding the company's cloud market share and capital spending, while Citi warned investors to brace for higher capital expenditures in the first quarter despite expecting a strong Q4. The revisions come as the company prepares to report Q4 results on July 29, with 53 of 56 analysts rating the stock a Buy or higher according to data from Koyfin.
Wells Fargo and Citi Lower Price Targets Amid Cloud and Capex Concerns
Wells Fargo said the setup for the fourth quarter is mixed amid concerns surrounding the company's cloud market share and capital spending, according to TheFly. The firm noted that improvements in Azure growth, AI adoption, and operating expense discipline should support a stronger fiscal 2027 outlook for Microsoft. Wells Fargo's price target of $625 implies more than 62% upside potential as of the stock's last close on Tuesday.
Citi said investors should brace for higher capital expenditures in the first quarter for Microsoft, while it expects the company to report a strong Q4. The firm said it remains positive on MSFT shares following constructive channel checks on CoPilot and believes the company is "increasingly strategically positioned" to optimize token spend and AI efficiency. Citi's price target of $570 implies more than 48% upside potential.
Mizuho Cuts Price Target to $490 in Broader Software Stock Revision
Mizuho lowered MSFT's price target to $490 from $550, with the latest target implying more than 27% upside potential, as part of a broader revision of software stocks in its coverage. The firm said its channel checks for software stocks were good overall, with public cloud data points being strong and AI adoption remaining robust.
Analysts Expect $4.24 EPS and $86.66B Revenue for Q4 Earnings on July 29
The company is set to report its Q4 results on July 29. Fiscal AI has polled the consensus estimate at $4.24 per share in earnings and $86.66 billion in revenue. Data from Koyfin suggests that analysts covering the stock are largely bullish going into earnings, with 53 out of 56 rating it a 'Buy' or higher, while the remaining rate it a 'Hold.'
Retail Sentiment Remains Bearish on Stocktwits as MSFT Down Over 20% Year-to-Date
On Stocktwits, retail sentiment on MSFT remained in 'bearish' territory over the last 24 hours. One user on the platform highlighted the importance of Microsoft Azure for enterprises. MSFT stock is down more than 20% so far this year and over the last 12 months, underperforming the S&P 500.
FAQ
What price targets did analysts set for Microsoft stocks ahead of Q4 earnings?
Wells Fargo set a price target of $625, Citi set $570, and Mizuho lowered its target to $490 from $550. All three firms maintained bullish ratings on MSFT despite the downward revisions.
When is Microsoft scheduled to report Q4 earnings and what are analysts expecting?
Microsoft is set to report its Q4 results on July 29. The consensus estimate is $4.24 per share in earnings and $86.66 billion in revenue, according to Fiscal AI.
How has Microsoft stock performed year-to-date?
MSFT stock is down more than 20% so far this year and over the last 12 months, underperforming the S&P 500. Retail sentiment on Stocktwits remained in bearish territory over the last 24 hours.
