Bitcoin Hits Two-Month Low Amid Fed Speculation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Newsfilter
- Bitcoin Price Drop: Bitcoin fell 2.5% on Friday to $82,300, marking a one-third decline from its record high in October, indicating market anxiety over potential Federal Reserve policy changes that could lead to a fourth consecutive month of losses, the longest losing streak in eight years.
- Fed Policy Impact: Speculation around former Fed official Kevin Warsh potentially succeeding Jerome Powell as Fed Chair intensified, as Warsh advocates for a smaller Fed balance sheet, which could diminish the appeal of cryptocurrencies, prompting investors to sell Bitcoin and other crypto assets.
- Ethereum Struggles: Ethereum also faced significant losses, trading down 2.9% at $2,735.48, reflecting the overall weakness in the crypto market, as investors remain uncertain about future trends, failing to follow the rallies seen in gold and stocks.
- Market Sentiment Deteriorates: A 10% drop in Microsoft stock due to high AI spending but only modest revenue growth sent tremors through global markets, exacerbating the selling pressure on cryptocurrencies and indicating a cautious attitude among investors towards risk assets.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 481.630
Low
500.00
Averages
631.36
High
678.00
Current: 481.630
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.
Microsoft Shares Plunge 10.23% After Earnings Report
- Stock Decline: Microsoft (MSFT) closed at $433.50, down 9.99% on Thursday, primarily due to investor concerns over slowing cloud growth, leading to a significant drop in share price.
- Surge in Trading Volume: Trading volume reached 126.5 million shares, approximately 366% above the three-month average, indicating a strong market reaction to Microsoft's earnings report, despite the company exceeding Wall Street's expectations for sales and EPS in Q2.
- Capital Expenditure Spike: Microsoft's capital expenditures surged 89% year-over-year, raising concerns about ROI as its Intelligent Cloud unit saw a 29% growth in Q2, with the market focusing on the short-lived nature of many investments.
- Valuation Analysis: With a forward P/E ratio of 26, the significant stock sell-off appears extreme given the company's ongoing sales and EPS growth, as management noted that much of the capex was directed towards short-lived assets, prompting investors to seek higher returns.
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Microsoft Azure Growth Falls Short of Expectations
- Performance Shortfall: Microsoft reported better-than-expected Q2 revenue and earnings; however, Azure's growth declined from 39% to 38% year-over-year, indicating a slowdown that may affect investor confidence.
- Analyst Rating Adjustments: Morgan Stanley removed Microsoft from its 'Top Pick' list while maintaining an 'Overweight' rating and a $650 price target, suggesting over 45% upside from the current price of $446.
- Market Reaction Fluctuations: Despite a 7.5% drop in stock price, retail sentiment on Stocktwits shifted to 'extremely bullish', reflecting confidence in Microsoft's future potential, even amid near-term pressures.
- AI Investment Direction Change: Barclays analysts noted that Microsoft's new AI capabilities are increasingly directed towards first-party products like Copilot, which may alter future growth expectations and impact overall market strategy.
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