Analysts Cut Microsoft (MSFT) Price Targets

Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Best AI Software Stocks to Buy Right Now. On January 29, Raymond James reduced its price target on Microsoft Corporation (NASDAQ:MSFT) from $600 to $580 and kept its Outperform rating after the company released its fiscal 2026 second-quarter results. The firm pointed out that Azure growth and guidance were about one percentage point less than what investors had expected.

Raymond James noted that Microsoft Corporation’s (NASDAQ:MSFT) Azure growth is being held back by the company’s own decisions to direct resources toward first-party applications and services and internal research and development efforts.

Also on January 29, Piper Sandler cut its price target on Microsoft Corporation (NASDAQ:MSFT) from $650 to $600 and maintained an Overweight rating. The firm noted that the company is still focusing on its broader platform, allocating capacity across Azure, first-party applications, and internal research and development instead of focusing only on Azure growth.

Piper Sandler believes that demand for Microsoft Corporation’s (NASDAQ:MSFT) services is still exceeding supply, with Azure’s growth reflecting the capacity that the company has allocated rather than end customer demand.

The firm also noted that Microsoft Corporation (NASDAQ:MSFT) is increasingly directing capital toward short-lived assets like GPUs and CPUs to deal with near-term capacity limits. Piper Sandler is still positive on the company and highlighted strong commercial remaining performance obligation growth of $625 billion including OpenAI, which is an increase of 110%. The research firm believes Microsoft Corporation (NASDAQ:MSFT) is in a good position to benefit from additional AI-related workloads.

Microsoft Corporation (NASDAQ:MSFT) is an American technology company that specializes in AI-powered cloud, productivity, and business solutions. The company develops and markets software, services, and hardware.

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Disclosure: None. This article is originally published at Insider Monkey.