Microsoft shares fall as Oppenheimer cuts price target

July 12, 2022

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Microsoft ($NASDAQ:MSFT) shares fell on Monday as investment firm Oppenheimer cut its price target on the tech giant, noting it expects a more cautious outlook when it reports quarterly results later this month. Analyst Timothy Horan lowered his price target to $300 from $340, but still kept the firm’s outperform rating, noting that there is likely to be some slowdown in Microsoft’s More Personal Computing segment, which accounts for 32% of revenue and includes Windows, devices and gaming. There is also likely to be a slowdown in search and advertising revenue, though that may be partially offset by the acquisition of Xandr, which closed on June 6. Horan also noted that he now expects the Activision Blizzard merger to not be accretive until fiscal 2024 — compared to a prior outlook of fiscal 2023 — due to continued looks from regulators around the world. Do you think this will affect Microsoft’s market and earnings in the long term? The short answer is that it’s impossible to say for sure how Microsoft will be affected by Oppenheimer’s downgrade in the long term. However, it’s worth noting that analysts’ expectations for the company’s upcoming earnings report are already fairly low, so it’s possible that Microsoft may not see as much of a negative impact as some investors fear. In the more immediate future, it’s possible that Microsoft shares may continue to fall in price as investors react to Oppenheimer’s downgrade. However, it’s also worth noting that Microsoft’s share price has been on a general downward trend over the past few months, so it’s possible that this latest development is simply part of a larger trend. Only time will tell how Microsoft’s share price will be affected in the long term.

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The firm cited concerns about the company’s cloud business and said it expects Microsoft’s revenue growth to slow in the coming quarters. Despite the cut, Oppenheimer still has a “buy” rating on Microsoft shares.

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