UBS Lowers Microsoft Target Price to $480, Maintains Buy Rating

UBS analysts pointed out that the recent pullback in Microsoft (MSFT) stock price has already mitigated some risks for the fourth quarter earnings, with limited downside potential. UBS has lowered Microsoft's target price from $510 to $480, citing the possibility of Microsoft raising its capital expenditure outlook while maintaining growth guidance for Azure. This combination of high spending and limited revenue growth expectations has not been well received by the market. Microsoft also faces multiple pressures, including exposure to risks from OpenAI, the threat of open-source models, and skepticism regarding its flagship productivity software business. Analysts stated that while they maintain a buy rating, they hold a more balanced view on the earnings report.

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