Microsoft Stock Struggles to Recover After Major Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: CNBC
- Significant Stock Drop: Microsoft experienced a 10% decline in stock price on Thursday following its earnings report, marking the largest single-day drop since 2020, despite second-quarter earnings exceeding analyst expectations, indicating market concerns over its Azure cloud platform.
- Cloud Service Growth Concerns: While Microsoft's cloud services achieved a 40% growth in the fiscal first quarter, performance fell short of market expectations, with Azure's growth rate at 39%, below StreetAccount's consensus of 39.4%, leading to diminished investor confidence in future growth.
- Infrastructure Allocation Issues: CFO Amy Hood stated that cloud business results could have been higher if more data center infrastructure had been allocated to customers instead of prioritizing in-house needs, raising questions about the company's strategic choices.
- Divergent Analyst Opinions: Despite some bullish sentiment in the market, Barclays analysts noted that investors focused too heavily on Azure growth, potentially overlooking the company's long-term strategic adjustments, suggesting management is prioritizing long-term benefits over short-term stock price fluctuations.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for META is 824.71 USD with a low forecast of 655.15 USD and a high forecast of 1117 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.
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 668.730
Low
655.15
Averages
824.71
High
1117
Current: 668.730
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
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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