Shares of Microsoft ( NASDAQ:MSFT ) have decreased by almost 30% year to date as a result of investor concerns over a slowdown in the PC market, the company’s crucial Azure cloud division, and enterprise software spending. Although these concerns will probably keep investors on edge, Morgan Stanley analyst Keith Weiss believes the company’s “strong and durable” demand in its commercial businesses should help improve earnings and revenue growth in the second half of 2023. This is making Microsoft stock attractive at these levels.
According to Weiss in a research note, Microsoft’s unique position as a one-stop shop should help demand outperform some of its competitors. Weiss claimed that Microsoft’s “strong competitive positioning” in front of significant growth opportunities in the software market is one of the company’s advantages.
As businesses look to consolidate vendors, “the company looks to sustain current investments to capture market share, win a higher portion of IT budgets, and maintain strategic long-term positioning,” Weiss said.
Microsoft stock has an overweight rating from Weiss and a $307 per share price target, representing a 20% increase over current prices.
Weiss added that Microsoft’s strength has been that its position in key markets has remained unchanged. The company has continued to change where it derives revenue, including Azure and Dynamics 365. Weiss believes that these initiatives will help Chief Executive Satya Nadella and the company achieve its goal of constant currency growth of 20% in its commercial businesses, especially when combined with Office 365’s “relatively durable” growth.
Weiss said that Microsoft is likely to keep experiencing growth i...
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