Microsoft Stock Forecast 2023, 2025 and 2027
Microsoft Stock Forecast: Latest MSFT Price
Article Coverage: Microsoft Performance Summary, Analyst’s forecast for next 12 months, Aggregated Forecast 2023-27, Will Microsoft reach $300? Bull Case vs Bear Case
Microsoft Stock Performance in the Last 12 Months
- 1 Month: +5.7%
- 3 Months: +29.3%
- 1 Year: +21.4%
Latest Microsoft Stock News
- In a resolution with the Federal Trade Commission (FTC), Microsoft has agreed to pay a penalty of $20 million. This settlement addresses charges raised against the company for violating the Children’s Online Privacy Protection Act (COPPA). Microsoft was found to have collected personal information from children who signed up for its Xbox video game console without obtaining the necessary parental knowledge or consent.
- Microsoft and OpenAI have announced a new partnership that will give U.S. federal agencies. A recent collaboration between Microsoft and OpenAI has resulted in a partnership aimed at providing access to OpenAI’s language-producing models for U.S. federal agencies. This access will be facilitated through Azure Government, Microsoft’s cloud service specifically designed for federal agencies.
- On June 6, 2023, Microsoft encountered two disruptions that impacted its Microsoft 365 productivity suite. The initial outage began at 10:00 a.m. ET, leading to the unavailability of numerous services such as Outlook, Teams, SharePoint Online, and OneDrive for Business. Subsequently, a second outage ensued at 6:30 p.m. ET, primarily affecting Outlook email functionality.
MSFT Stock Technical Analysis
Microsoft stock price has been on an uptrend since the AI boom started with Microsoft being a major force behind ChatGPT. The stock price broke above $300 and since then the buyers have been in control.
Here is how MSFT Performed on the Last Trading Day
- Open: $323.38
- Close: $325.26
- Gain/Loss: +0.58%
- Market Cap: $2.40 T
After closing lower on Wednesday, MSFT gained marginally on the last trading day. The MSFT stock price is above $325 once again.
On the 4-hour timeframe chart above, the net MSFT stock price is above both the 50-day and 200-day Moving Averages. The 50-day MA of MSFT stock is $304 and the 200-day MA is $261. The net MSFT stock price is above both the 50-day and 200-day moving averages, indicating that the stock price is trading at a higher level compared to these averages. This suggests that the stock has been performing relatively well.
The RSI reading at the time of writing is 48.83. It is in the neutral zone. The RSI on the last trading day broke above the downtrend. The buyers are trying to reverse the overall momentum.
The MACD (12, 26) and Williams%R indicators both suggest a bearish trend for Microsoft stock. On the MACD chart, the MACD line is below the signal line, and the volume histogram bars have increased on the bearish axis. It is a sell signal.
The Williams Percent Range of MSFT is -82.99. This means the stock is oversold. The selling pressure is up. The sellers have outnumbered the buyers.
Overall MSFT stock is neutral for the next trading day. Check out the latest Crowdwisdom360 Indicators which is updated twice every day, once in the middle of the trading session and the second time at the end of the Trading session.
Microsoft Stock Forecast Today
|1. Market's Wisdom||Bearish|
|1a. Market Data||Bearish|
|1b. Technical Recommendation||Sell|
|2. Crowd's Wisdom||Partially Bearish|
|2a. Social Media Buzz||Steady|
|2b. Social Media Sentiment||Neutral|
Latest Microsoft Stock Video
Microsoft Stock Price Prediction for the Next 12 Months
|Average MSFT Stock Forecast for the next 12 Months||$386|
|Evercore ISI Group||$400|
Microsoft Stock Price Prediction for the Next 5 Years (Aggregated)
- Microsoft Stock Price Prediction 2023 is $371
- Microsoft Stock Price Prediction 2024 is $431
- Microsoft Stock Price Prediction 2025 is $480
- Microsoft Stock Price Prediction 2026 is $538
- Microsoft Stock Price Prediction 2027 is $581
Q1 Results Summary
- Revenue increased $4.8 billion or 11% driven by growth in Intelligent Cloud and Productivity and Business Processes.
- Cost of revenue increased $1.8 billion or 13% driven by growth in Microsoft Cloud and Gaming, offset in part by a reduction in depreciation expense.
- Gross margin increased $3.0 billion or 9% driven by growth in Intelligent Cloud and Productivity and Business Processes and the change in accounting estimate, offset in part by a decline in More Personal Computing.
- Operating expenses increased $1.7 billion or 15% driven by investments in cloud engineering, LinkedIn, Nuance, and commercial sales.
- Operating income increased $1.3 billion or 6% driven by growth in Intelligent Cloud and Productivity and Business Processes and the change in accounting estimate, offset in part by a decline in More Personal Computing.
- Revenue, gross margin, and operating income included an unfavorable foreign currency impact of 5%, 7%, and 9%, respectively.
- Cost of revenue and operating expenses both included a favorable foreign currency impact of 3%.
Microsoft Stock Forecast 2023: Is Microsoft a Good Investment?
Reasons to Invest In Microsoft Stock
One of the FAAMG stocks, Microsoft has been a good investment. FAAMG is an abbreviation for five top-performing tech stocks in the market, namely, Meta (formerly Facebook), Amazon, Apple, Microsoft, and Alphabet’s Google. Here are the reasons to invest in Microsoft stock:
Strong financials: Microsoft has maintained strong financials. The market cap of Microsoft has been either over $2T or close to it. It is one of the largest companies in the world and has shown consistent revenue growth and high-profit margins.
Strong leadership: Microsoft has a strong leadership team. The company is currently led by CEO Satya Nadella, who has been credited with turning the company around and leading it through a successful transition to the cloud.
Diversified revenue streams: Microsoft has a diversified business model, with revenue coming from a variety of sources. The latest partnership with ChatGPT is likely to open up new revenue sources for Microsoft in the future. This diversification makes the company less reliant on any single product or service, which can reduce its exposure to risk.
Cloud computing growth: Microsoft has been investing heavily in its cloud computing business, which includes its Azure platform, the biggest rival of Amazon’s AWS. This segment of the business has seen strong growth in recent years and is expected to continue growing as more companies move their operations to the cloud.
Impact of BingGPT
Despite being the major operating system provider, Microsoft has failed to compete with Google when it comes to Web search. However, Microsoft’s recent ChatGPT bet could change things forever.
Microsoft recently launched a new version of Bing which comes with an integrated AI platform, ChatGPT. This is the biggest bet of Microsoft to compete with Google.
However, how this will affect the search industry is for time to decide. If Microsoft is able to increase its acceptance in the search industry, this will directly help the MSFT stock price surge.
Reasons to Not Invest In Microsoft Stock
Competition: Microsoft is now in multiple businesses but it faces intense competition in many of its key businesses. Apple’s macOS is its Windows competitor, in cloud computing, it is competing against Amazon, and its Gaming console Xbox competes with Sony’s Play Station. This competition could lead to pricing pressure and could make it more difficult for the company to maintain its market share and profitability.
Dependence on key products: Microsoft has diversified its business but for a major part of its revenue it relies on key products like Windows and Office. If demand for these products were to decline, it could have a significant impact on the company’s financial performance.
Regulatory risks: As a large and influential tech company, Microsoft could be subject to increased regulatory scrutiny in the future. This could result in fines or other penalties and could impact the company’s financial performance.
Will Microsoft Reach $300 or Will Microsoft Stock Go Up?
- The expectation of stellar growth from Azure- Azure is the cloud computing wing of Microsoft which has seen some stellar growth in the last few quarters. For example, in the first quarter of 2022, Microsoft reported a 50% increase in Azure revenue, which dropped down to 40% by Q4 2022. In Q1 2023, the results for which were reported on October 25th, Azure revenue was up 35% which is still better than other segments of Microsoft business.
However, with the macroeconomic headwinds easing out in 2023, Azure revenue is expected to shoot up again to mid-50% growth. Also, the Intelligent Cloud segment, which is primarily made up of Azure revenue contributes to around 40% of the company’s revenue in each quarter.
According to Fortune Business Insights, the cloud computing market is expected to see a CAGR of around 17% between 2022 and 2028 and Azure is responsible for 21% of market stock, the second largest after Amazon Web Services, Microsoft is in a big beneficial position to cash in from the growing segment.
- Acquisition of Activision Blizzard – Microsoft sold its first Xbox console in 2001, and since then it has lost every console battle with Sony’s PlayStation. However, the tide is turning soon i.e., the margin between PS5 and Xbox series X/S is narrowing as seen in 2022.
Additionally, Microsoft is using its financial power over Sony to make acquisitions at Xbox Game Studios. The most important deal is a $68.7 billion offer to buy out Activision Blizzard. This deal is expected to close during Microsoft fiscal 2023, ending in June. With this, Microsoft will offer the most comprehensive catalog of gaming. So, instead of selling more consoles, it can enlarge its Xbox users and can hike subscription fees.
Activision Blizzard will give Microsoft a base of 361 million players and help it reach the 1 billion mark. As the gaming industry is shifting from core hardware PC service to subscription service, Microsoft is poised to gain big with its cash power.
- Netflix chose Microsoft for its ad-supported option- Earlier this year, everyone was amazed when Netflix announced a plan to come up with an ad-supported version to boost revenue and make up for lost subscribers. In July 2022, they have chosen Microsoft as an option to go with an ad-supported version.
Google and Comcast were the front runners & Microsoft was like a dark horse. But the argument that Microsoft does not have its streaming service helped them win the battle against the likes of Google and Comcast. They acquired digital ad business Xandr from AT&T in 2021.
After this acquisition, Microsoft can go to any company for digital ad service and can claim that it has capabilities and there is no direct competition also as Microsoft does not have a streaming service of its own.
In 2023, Microsoft can win can crack more such ad revenue deals and can add to its revenue a big amount. Also, the ad industry which has seen a major downfall in 2022, is expected to stand out in 2023.
Also Read: Microsoft Stock Split
Microsoft Stocks Forecast 2023: Bear Case
- The bad outlook – Microsoft’s Q1 fiscal 2023 results were a mixed bag. The revenue grew 11% YoY to $50.1 billion and the Intelligent Cloud segment grew 20% to $20.3 billion. However, they were a few concerns that raised the eyebrows of analysts and investors.
First of all, its highest growth segment Azure’s growth story deaccelerated i.e., it grew 50% in FY 2022 Q1, 40% in Q4, and now only 35% in Q1 FY 2023 despite that investors were expecting better numbers from Azure. But more worrisome is the overall growth outlook for Q2 FY 2023. Overall revenue is projected to grow only 2% YoY to $52.85 billion, missing analysts’ Q2 guidance of $56.05 billion by a fair distance.
Furthermore, Azure growth is expected to slow down even more to only the low 30% range. Although, investors can digest ups and down in the Personal Computing segment, but, do not want to see slowing growth in Azure, especially when its peer Alphabet’s Google Cloud saw momentum in recent quarters and is quite bullish going into the final quarter of 2022.
In 2023, If Microsoft reports weak guidance for its Q3 and Q4 for fiscal 2023 ending in June for any reason, it will certainly bring down its stock price as it did by more than 7% on October 26th, 2022.
- De- Growth in Personal Computing segment –Consumer demand has fallen across industries due to the rising cost of living, but the PC market is the one with the hardest hit. According to Gartner, PC shipments fell 19.5% in June- September quarter. When AMD announced a shortfall in revenue in the third quarter of 2022 due to plummeting PC sales, Microsoft stock fell 4.5% in a single day.
In the Q1 fiscal year 2023, Microsoft reported a de-growth of 16% in the Personal Computing segment YoY which constitutes about 30% of the overall revenue of the company. With the recession impending in the first half of 2023, it is expected for more de-growth.
Microsoft Stocks Forecast: Conclusion
Is it Safe to Bet on Microsoft in 2023?
To conclude, Microsoft stock has fallen 31% since January 2022. While it has sailed the economic downturns better than its peers, the important question is what 2023 holds for Microsoft stock.
However, it has to be believed that 2023 will be the year for Microsoft due to a couple of reasons. First and foremost is its diversification of business i.e., it is no longer only a Windows company and its cloud computing segment stand out among others. Its buyout of Activision Blizzard and partnership with Netflix will mark new avenues of revenue in 2023.
Trading at a P/E of 24.85 is not very cheap but it is much below its historical value of the 30s in the last couple of years. Therefore, Microsoft stock will add great value to anybody’s portfolio in the coming year.
Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.