Microsoft: Still My Highest-Conviction Stock (Rating Downgrade)


  • Microsoft Corporation’s fiscal Q2 2023 results were solid, although growth was down to just 2% due to lower consumer spending.
  • Not all segments performed poorly, as the intelligent cloud segment with Azure still saw solid growth and outperformed expectations.
  • It was the Q3 2023 outlook from management that caused for some concern among analysts and investors, as Microsoft sees a softening in demand for Azure services.
  • Microsoft has solid revenue growth drivers in place due to its exposure to secular trends such as cloud, gaming, and AI.
  • I downgrade my rating on the company from strong buy to buy with a price target of $280 based on current FY24 EPS expectations.

Microsoft logo

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Since Microsoft Corporation (NASDAQ:MSFT) released its fiscal Q2 2023 results on January 24, 2022, there has been a storm of opinion raging around across all platforms, including Seeking Alpha. Everyone seems to have a different

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Intelligent cloud segment growth

Intelligent cloud segment growth (Microsoft)

Microsoft Azure growth rates

Microsoft Azure growth rates (Statista)

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Microsoft Outlook 3Q23 (Microsoft)


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Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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