Microsoft Analyst Bullish On Q2 Prospects With Strong Azure, AI Growth

Citi analyst Tyler Radke reiterated a Buy rating on Microsoft Corp MSFT with a price target of $470.

His latest round of fieldwork (reseller survey, channel checks, and CIO survey) gave him incremental confidence heading into the fiscal second quarter, with resellers indicating high quota achievement levels on a broad-based strength (Azure commitments + Dynamics). 

Also Read: Microsoft Represents Solid Reacceleration Story in 2024 – Bank of America Analyst Raises Forecast

Radke expects a solid beat and raise and notes improving IT budgets, partially driven by generative AI where Microsoft is in a leadership position with multiple monetization vectors which can drive a durable multi-year reacceleration in top/bottom line growth. 

As such, Microsoft remains the analyst’s preferred mega-cap name in software. 

Radke increased his projections, citing improved Azure growth, contributions from Copilot, favorable foreign exchange impacts, and a stronger PC market.

The analyst projected second-quarter revenue and EPS of $61.597 billion (versus consensus of $61.04 billion) and $2.80 (versus consensus of $2.75).

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Microsoft‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Microsoft does pay a dividend, which yields 0.9% per year as of the closing price on Jan. 24, 2024. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

Price Action: MSFT shares traded higher by 1.07% at $403.16 on the last check Wednesday.

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