Microsoft's (MSFT) Q1 Results Were "A Lot Better Than Anyone Thought," Investment Bank Says

Appearing on CNBC, Brent Thill, an analyst at investment bank Jefferies, stated that MSFT's first-quarter results, reported last week, were "a lot better than anyone thought" they would be.

The analyst increased his price target on the name to $525 from $500 while keeping an Outperform rating on the name.

More of Thill's Thoughts on MSFT

Large companies' demand for Microsoft's products, along with the tech giant's margins, were strong, the analyst stated. Moreover, MSFT said that it can monetize AI more effectively than it monetized the cloud in its nascent stages, he noted.

Also importantly, although in recent months there were fears that MSFT would lower its spending on data centers, that has not occurred.

Thill's Thoughts on the Macro Implications of MSFT's Recent Performance

The tech giant noted that large companies' spending on its products continued to be strong last month.

While Thill called that "a big surprise," he expects IT companies to be hurt by the fallout from the tariffs in the second half of the year.

With many consumer-facing companies reporting slowdowns in their businesses, the analyst expects the latter trend to eventually undermine the performances of IT firms.

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