BMO Capital Markets Has Lowered Expectations for Microsoft (NASDAQ:MSFT) Stock Price

Key Points

• BMO Capital Markets cut its price target on Microsoft from $575 to $505 but kept an "outperform" rating, with the new target implying roughly a 18.87% upside from the stock's current ~ $424.82 level.
• Analyst sentiment remains broadly positive — MarketBeat shows a consensus "Moderate Buy" with an average price target of $568.16 — though multiple firms have trimmed targets recently (Wells Fargo, Evercore, Wolfe, etc.).
• Microsoft beat fiscal quarter expectations (EPS $4.14 vs. $3.86; revenue $81.27B, +16.7% YoY) and has bullish catalysts like Accenture's Copilot rollout and a A$25B Australia cloud investment, but faces near-term headwinds from the revised OpenAI licensing, analyst cuts and voluntary workforce buyouts.

Microsoft (NASDAQ:MSFT - Get Free Report) had its target price lowered by analysts at BMO Capital Markets from $575.00 to $505.00 in a research note issued on Tuesday. The firm currently has an "outperform" rating on the software giant's stock. BMO Capital Markets' target price would indicate a potential upside of 18.87% from the stock's current price.

A number of other equities research analysts have also issued reports on the company. Bank of America started coverage on Microsoft in a research report on Tuesday, March 24th. They issued a "buy" rating and a $500.00 target price on the stock. Wells Fargo & Company dropped their target price on Microsoft from $630.00 to $615.00 and set an "overweight" rating on the stock in a research report on Thursday, January 29th. Royal Bank Of Canada reaffirmed an "outperform" rating on shares of Microsoft in a research report on Monday, March 2nd. Evercore lowered their price target on Microsoft from $640.00 to $580.00 and set an "outperform" rating on the stock in a research report on Thursday, January 29th. Finally, Wolfe Research lowered their price target on Microsoft from $625.00 to $530.00 and set an "outperform" rating on the stock in a research report on Thursday, January 29th. Two research analysts have rated the stock with a Strong Buy rating, thirty-eight have issued a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average price target of $568.16.

Microsoft Trading Up 0.0%

NASDAQ:MSFT opened at $424.82 on Tuesday. Microsoft has a fifty-two week low of $356.28 and a fifty-two week high of $555.45. The company has a debt-to-equity ratio of 0.09, a current ratio of 1.39 and a quick ratio of 1.38. The stock has a market capitalization of $3.15 trillion, a PE ratio of 26.57, a price-to-earnings-growth ratio of 1.60 and a beta of 1.11. The business's 50-day simple moving average is $393.95 and its 200-day simple moving average is $449.40.

Microsoft (NASDAQ:MSFT - Get Free Report) last released its quarterly earnings data on Wednesday, January 28th. The software giant reported $4.14 earnings per share for the quarter, beating the consensus estimate of $3.86 by $0.28. Microsoft had a return on equity of 32.34% and a net margin of 39.04%.The business had revenue of $81.27 billion for the quarter, compared to analysts' expectations of $80.28 billion. During the same quarter in the previous year, the business posted $3.23 EPS. Microsoft's revenue for the quarter was up 16.7% on a year-over-year basis. Sell-side analysts expect that Microsoft will post 16.54 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other news, Director John W. Stanton acquired 5,000 shares of the firm's stock in a transaction on Wednesday, February 18th. The shares were purchased at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the acquisition, the director directly owned 83,905 shares in the company, valued at $33,339,651.75. This represents a 6.34% increase in their position. The purchase was disclosed in a document filed with the SEC, which is accessible through this link. Also, EVP Kathleen T. Hogan sold 12,321 shares of the company's stock in a transaction on Friday, March 6th. The shares were sold at an average price of $409.52, for a total value of $5,045,695.92. Following the completion of the transaction, the executive vice president directly owned 137,933 shares in the company, valued at approximately $56,486,322.16. This represents a 8.20% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 0.03% of the company's stock.

Institutional Trading of Microsoft

Large investors have recently modified their holdings of the stock. BLVD Private Wealth LLC grew its position in Microsoft by 0.6% during the third quarter. BLVD Private Wealth LLC now owns 3,169 shares of the software giant's stock worth $1,641,000 after buying an additional 19 shares during the period. Longfellow Investment Management Co. LLC grew its position in Microsoft by 51.3% during the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock worth $29,000 after buying an additional 20 shares during the period. Magnolia Capital Management Ltd. grew its position in Microsoft by 0.3% during the third quarter. Magnolia Capital Management Ltd. now owns 6,509 shares of the software giant's stock worth $3,371,000 after buying an additional 20 shares during the period. ARK & TLK Investments LLC grew its position in Microsoft by 1.0% during the third quarter. ARK & TLK Investments LLC now owns 1,935 shares of the software giant's stock worth $1,002,000 after buying an additional 20 shares during the period. Finally, Rochester Wealth Strategies LLC grew its position in Microsoft by 2.9% during the third quarter. Rochester Wealth Strategies LLC now owns 700 shares of the software giant's stock worth $363,000 after buying an additional 20 shares during the period. 71.13% of the stock is owned by institutional investors and hedge funds.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Accenture will roll Copilot out to all ~743,000 employees, a large commercial endorsement for Microsoft’s Copilot/365 revenue path and Azure usage prospects. Accenture to roll out Copilot
• Positive Sentiment: Microsoft signed a long‑term hyperscale GPU/data‑center agreement that underpins demand for Azure AI capacity and supports third‑party operator revenue (IREN deal coverage highlights the broader tailwind to Microsoft cloud). Bull Case For IREN
• Positive Sentiment: Microsoft announced a A$25B investment to expand AI and cloud infrastructure in Australia — a large, multi‑year capex commitment that signals long‑term demand for Azure and services. MSFT Announces A$25B Investment
• Neutral Sentiment: Earnings are an imminent catalyst (MSFT reports fiscal Q3 results April 29). Consensus expects continued AI-driven revenue growth, making the report a key near‑term driver of the stock. Earnings Preview
• Neutral Sentiment: High‑profile investors (e.g., Michael Burry) disclosed purchases, signaling value‑buyer interest after recent declines — supports the “buy the dip” narrative but is not a guaranteed catalyst. Michael Burry Buys MSFT
• Negative Sentiment: Microsoft and OpenAI revised their partnership: Microsoft’s license is no longer exclusive, revenue‑sharing was restructured/capped, and OpenAI can sell on rival clouds. That reduced the perceived unique strategic advantage and sparked an early selloff. Reuters: Microsoft to end exclusive license
• Negative Sentiment: Analysts cut price targets and warned of near‑term headwinds (Oppenheimer trimmed its PT; Cantor Fitzgerald lowered its target), reflecting investor concern about AI capex, revenue sharing changes and margin pressure. Analyst updates
• Negative Sentiment: Microsoft is offering voluntary buyouts (~7% of workforce reported), a cost‑control move that signals margin management but also acknowledges reorganization pressure amid heavy AI investment. MSFT Offers Voluntary Buyouts
• Negative Sentiment: Service disruption: an Outlook/Outlook.com sign‑in outage affected users and attracted press attention — operational hiccup but limited long‑term financial impact. Outlook outage fixed

About Microsoft

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft's product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).

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