Morgan Stanley updated its Dividend Equity Portfolio, dropped this big tech name
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 31 2024
0mins
Should l Buy MSFT?
Source: Yahoo Finance
Morgan Stanley's Portfolio Changes: Morgan Stanley has restructured its Dividend Equity Portfolio by removing Microsoft due to concerns over rising capital expenditures and reallocating funds to General Dynamics and Constellation Energy, which are expected to benefit from increased defense spending and energy demands, respectively.
Adjustments in Stock Weights: The firm also adjusted the weights of other stocks, increasing positions in dividend-paying companies like Merck & Co., M&T Bank, and Johnson & Johnson, while reducing exposure to T-Mobile and Starbucks amid competitive pressures.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 401.860
Low
500.00
Averages
631.36
High
678.00
Current: 401.860
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Next-Gen Xbox Prototypes: Microsoft plans to send prototypes of its next-generation Xbox console to game developers in 2027, aiming to close the gap with Nintendo and Sony, indicating the company's ongoing commitment to the gaming market.
- Custom Chip Benefits: The new hardware will feature a custom chip from AMD, delivering a significant leap in ray tracing performance while integrating intelligence directly into the graphics and compute pipeline, resulting in major gains in efficiency, scale, and visual ambition, enhancing player immersion.
- Leadership Change: This announcement comes weeks after longtime gaming head Phil Spencer announced his retirement, with AI executive Asha Sharma taking over, signaling a renewed strategic commitment to Xbox and reshaping the future of console gaming.
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- Nvidia's Market Opportunity: Despite Nvidia's (NVDA) stock being down 11% from its all-time high, its price-to-earnings ratio of 21.6 is lower than the S&P 500's 21.7, and significant growth is expected over the next five years due to the AI spending boom, making it a smart investment choice.
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- TSMC's Growth Outlook: Taiwan Semiconductor Manufacturing (TSM), as the world's largest chip foundry, anticipates a nearly 60% compound annual growth rate for AI-related chips from 2024 to 2029, making it a quality stock to hold as AI spending continues to rise.
See More
Microsoft Stock Down Despite Positive AI Investment Outlook
- Microsoft AI Investment Growth: Microsoft is heavily investing in its Azure cloud platform to support AI workloads, with Q2 revenue rising 39% year-over-year, indicating strong growth potential in AI buildout, even as its stock is down 25% from its all-time high, presenting a buying opportunity for long-term investors.
- Nvidia's Attractive Valuation: Despite Nvidia's stock being down 11% from its all-time high, its forward P/E ratio stands at 21.6, slightly below the S&P 500's 21.7, and with significant growth expected over the next five years due to AI spending, it remains a compelling stock to buy.
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See More
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- Microsoft Capital Expenditure: Microsoft has invested over $72 billion in AI infrastructure in the first half of fiscal 2026, with spending exceeding expectations; analysts believe its diversified business will mitigate risks associated with AI reliance, and the price target suggests a 47% upside.
- Copilot User Growth: Microsoft's AI assistant Copilot currently has 15 million paid users, which is modest compared to its vast Microsoft 365 user base, yet analysts see significant future growth potential that could become a new revenue driver for the company.
- Oracle Performance Rebound: Oracle exceeded market expectations in its latest earnings report and raised its fiscal 2027 revenue guidance by $1 billion, showcasing strong cloud performance; analysts generally rate the stock as a buy, with a projected 54% upside.
- Debt and Market Concerns: Despite Oracle taking on substantial debt for data center construction and market concerns regarding its margins, analysts believe its partnership with OpenAI will provide robust support for future growth, significantly improving the risk-reward profile.
See More
Investors Concerned About AI Infrastructure Spending
- Surging Capital Expenditures: Microsoft has committed over $72 billion to AI infrastructure in the first half of fiscal 2026, which, while exceeding expectations, raises investor concerns about the sustainability of returns, potentially impacting its stock performance.
- Analysts Bullish on Microsoft: Of the 33 Wall Street analysts who have issued reports in the past three months, 30 have rated Microsoft as a buy, with an average price target implying approximately 47% upside, reflecting confidence in its long-term growth potential.
- Oracle's Stock Volatility: Oracle's stock has swung wildly over the past six months; despite beating Wall Street expectations in its latest earnings report and raising fiscal 2027 revenue guidance by $1 billion, investor concerns about profitability in its AI data centers persist.
- Optimism Among Analysts for Oracle: Among 32 analysts, 28 have given Oracle a buy rating, with an average price target suggesting a 54% upside; although Deutsche Bank analyst lowered the target from $375 to $300, it still indicates significant investment potential.
See More
Nvidia, TSMC, and Microsoft: Capitalizing on AI Opportunities
- Nvidia's Financial Performance: Nvidia reported fourth-quarter revenue of $68.17 billion and net income of $42.96 billion for fiscal 2023, highlighting its pivotal role in global AI infrastructure, with expectations of continued benefits from rising AI demand in the coming years.
- TSMC's Market Position: TSMC generated 58% of its revenue from high-performance computing in fiscal 2025, with AI accelerator revenue projected to grow at a mid-to-high 50% CAGR, solidifying its leadership in the global AI market.
- Microsoft's Cloud Infrastructure: Microsoft Azure held a 21% market share at the end of 2025, and despite facing a shortfall in AI workload demand, it is heavily investing in GPUs and data center infrastructure to enhance its competitive moat.
- Integration of AI Ecosystem: The three companies are forming a tightly integrated AI ecosystem through their respective technologies and market strategies, which is expected to drive business growth and increase market share over the next decade.
See More
