Morgan Stanley's recent report highlights Microsoft’s (MSFT, Financial) impressive performance in its third fiscal quarter, with all revenue segments exceeding expectations and profit margins on the rise. The company's outlook for the fourth fiscal quarter indicates stable demand and revenue surpassing market predictions. These factors are anticipated to help Microsoft overcome market concerns.
The firm remains optimistic about Microsoft’s advancements in the generative AI sector. It suggests a strong buy recommendation, raising the price target from $472 to $482. The valuation is based on an earnings multiple of 25 times the company's estimated earnings per share under U.S. Generally Accepted Accounting Principles by the fiscal year 2026.
