Microsoft Corporation (NASDAQ:MSFT) is past its glory days and unlikely to generate long-term value. That’s the sentiment echoed by UK-based Liontrust fund managers on May 19. The sentiments come on shares of the software giant bouncing back after imploding on the waning artificial intelligence-driven run. The stock is up by about 9% year to date, an outperformance cemented by strong financial results and growth in the cloud unit Azure.
An investor intently focused on the stock exchange monitor.
Amid the outperformance, Storm Uru and Clare Pleydell-Bouverie, co-managers of Liontrust’s Innovation Fund, have shed all their holdings in the stock after 6 years of investment. According to the fund manager, Microsoft’s Windows operating system, which has been a key growth driver on the software side, is no longer necessary in the age of software 2.0.
The fund managers insist that Microsoft, like other tech giants, is increasingly being squeezed by a faster innovation cycle and new artificial intelligence competitors. Additionally, they point to a collapse in product development timelines driven by advances in software automation. Lion Trust fund managers have also questioned whether Microsoft’s significant investment in AI powerhouse OpenAI is enough to safeguard its dominance in software.
The remarks starkly contrast the Buy rating by Goldman Sachs analysts, who have also hiked their price target to $550 from $480. Goldman Sachs insists the tech giant is well-positioned for robust growth given its investments and advancements in AI.
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