Microsoft (MSFT, Financial) drew analyst attention Thursday after Wedbush Securities flagged rising concerns about the impact of ongoing tariff instability on capital spending. The firm warned that mixed policy signals — including a 90-day tariff pause and shifting bond yields — are already hurting business confidence.
Wedbush analyst Dan Ives maintained his Outperform rating on Microsoft but lowered his price target to $475 from $550. He said the ongoing tariff back-and-forth is creating short-term turbulence, particularly for companies with supply chains tied to China. Microsoft's exposure through cloud infrastructure and component costs puts it squarely in the path of this uncertainty, according to the note.
Ives added that the unpredictable environment may push back between 10% to 15% of cloud and artificial intelligence initiatives, with Microsoft's Azure platform at the center of the slowdown. As a result, Wedbush cut estimates for Microsoft's June quarter and full fiscal 2026.
Still, Ives believes investors might overlook short-term weakness if delayed contracts and spending shift to later in the year. He described the June quarter as potentially being treated as a “mulligan” if activity rebounds in the following quarters.
Microsoft is scheduled to release its next earnings report on April 30. Consensus estimates suggest earnings per share of $3.23 on revenue of $68.51 billion for the quarter.
