Global investment bank Oppenheimer Holdings slashed Microsoft stock (NASDAQ: MSFT) price target, citing AI spending concerns. MSFT remains under pressure as it is down nearly 22% since six months. It is among the hardest-hit tech companies, as Wall Street’s concerns about its capex on AI have yet to subside. The capital expenditure stands at $120 billion, with investments spread across various countries.
Oppenheimer Holdings previously predicted that Microsoft stock could hit a high of $630. It maintained an Outperform rating with a buy call. The investment bank remained confident that the cloud services Azure has upside potential for earnings. However, the company slashed the MSFT price target on Monday, predicting a lower potential.
Also Read:Poet Stock Crashes 47% After Marvell Deal Falls Apart: Is It a Buy?
The revised price prediction from Oppenheimer Holdings for Microsoft stock is $515. That’s a reduction of $115, which is a steep slash on MSFT, as AI spending is eating up a larger share it can handle. Microsoft is yet to see returns against the investment, making the stock susceptible on Wall Street. Oppenheimer Holdings’ recent slashing of MSFT’s target raises concerns that the company might have gone too far on capital spending.
Microsoft stock is currently trading at the $424 level on Tuesday, but mostly remains on the front foot this month. Tech stocks in general fared well in April ahead of theupcoming earnings call on the 29th. Even Microsoft’s earnings call is scheduled on the same date, with analysts predicting it could beat market expectations.
If Oppenheimer’s price target for Microsoft stock turns out to be accurate, traders could make a profit of $90 per share. That’s close to 21% returns, but a big slash compared to the previous price target of $630, which could have delivered profits close to 50%. Oppenheimer is still maintaining its buy call for MSFT even after the target reduction.
Source: Watcher Guru
