KPMG research reveals that enterprises plan to increase their expenditure on Gen AI in 2025, and survey findings from Morgan Stanley reveals how Microsoft will be a key beneficiary.
The kickoff of a high-profile antitrust case against a peer and an analyst's price target reduction put the hurt on Microsoft (MSFT -2.74%) shares Monday. The tech giant wasn't looking all that mighty on the exchange, with a more than 3% drop in price in late afternoon trading.
Citi analysts also lower their capital expenditure estimates on Microsoft, pointing to a handful of factors including a heightened recessionary backdrop.
The "Magnificent Seven" is a name given to Apple, Microsoft (MSFT -1.13%), Nvidia, Amazon, Alphabet, Meta Platforms, and Tesla because of their impact on the market over the past few years. Unfortunately, the "Magnificent Seven" hasn't been so magnificent in recent weeks, with all seven down year to date.
Despite a 10% stock decline, I maintain a 'Buy' rating for Microsoft's long-term growth prospects, despite near-term trade turmoil impacts. Trade tensions and tariffs create uncertainty, affecting MSFT's hardware sales and potentially increasing R&D costs, impacting consumer confidence and economic growth. Earnings estimates for the Company have been revised down for 2026–2028, but long-term revenue and EPS projections remain positive, supporting a $429.65 price target.
Microsoft presents a buying opportunity due to its investments in the consumer discretionary sector, particularly through acquisitions of major video game studios like Activision Blizzard and ZeniMax Media. I believe the company's exclusive game titles and subscription services will drive significant revenue growth as new installments of popular game series are released. Despite current market uncertainties, Microsoft's strong fundamentals, high margins, and ability to pay off debt make it a resilient long-term investment.
On April 2, President Donald Trump announced plans to impose a series of tariffs on imported goods from America's trading partners, which sparked fears of a global trade war and an economic slowdown. Investors have shunned stocks in favor of safe-haven assets like cash, so the S&P 500 (^GSPC 0.13%) is currently down 14% from its record high.
Microsoft appears to be a better investment option compared to Nebius at the moment.
Microsoft (MSFT -3.67%) had one of its more forgettable sessions on the stock market Wednesday, with its share price melting by 3.7% at closing time. Yet this had less to do with its own operations, and more to do with a move by a business in which it's invested.
MSFT outpaces ORCL with stronger cloud growth, AI innovation, and financial resilience, thus offering superior long-term investment potential.
A software sector ETF is down to a key level for buyers.
Microsoft (MSFT) concluded the recent trading session at $387.81, signifying a -0.16% move from its prior day's close.