MSFT Sees Fresh Price Target Cuts Days Before Quarterly Report – Citi Sees Strong Q4 But Expects Higher Capex Spend In Q1

• Wells Fargo said that amid cloud market-share and capital-spending concerns, the setup for the company’s Q4 is mixed.
• Citi said it remains positive on Microsoft’s shares following its channel checks.
• Data from Koyfin suggests that analysts covering the stock are largely bullish going into earnings.

Microsoft (MSFT) received downward price target revisions from at least three Wall Street analysts, while they maintained their respective bullish ratings ahead of the tech giant’s fiscal fourth-quarter results later this month.

At the time of writing, MSFT stock traded marginally in the green during Wednesday’s premarket.

Wells Fargo And Citi Expect Higher Spending For MSFT

Wells Fargo said the setup for the fourth quarter (Q4) is mixed amid concerns surrounding the company’s cloud market share and capital spending, according to TheFly. The firm noted that improvements in Azure growth, AI adoption, and operating expense discipline should support a stronger fiscal 2027 outlook for Microsoft. 

Citi said investors should brace for higher capital expenditures in the first quarter (Q1) for Microsoft, while it expects the company to report a strong Q4. The firm said it remains positive on MSFT shares following constructive channel checks on CoPilot and believes the company is "increasingly strategically positioned" to optimize token spend and AI efficiency.

Wells Fargo’s price target of $625 implies more than 62% upside potential as of the stock’s last close on Tuesday, while Citi’s price target of $570 implies more than 48% upside potential.

Mizuho’s Take On MSFT

Mizuho, on the other hand, lowered MSFT’s price target to $490 from $550, with the latest target implying more than 27% upside potential, as part of a broader revision of software stocks in its coverage. The firm said its channel checks for software stocks were good overall, with public cloud data points being strong and AI adoption remaining robust.

The company is set to report its Q4 results on July 29. Fiscal AI has polled the consensus estimate at $4.24 per share in earnings and $86.66 billion in revenue. Data from Koyfin suggests that analysts covering the stock are largely bullish going into earnings, with 53 out of 56 rating it a ‘Buy’ or higher, while the remaining rate it a ‘Hold.’

What Do Retail Traders Think About MSFT?

On Stocktwits, retail sentiment on MSFT remained in ‘bearish’ territory over the last 24 hours.

One user on the platform highlighted the importance of Microsoft Azure for enterprises.

MSFT stock is down more than 20% so far this year and over the last 12 months, underperforming the S&P 500.

For updates and corrections, email newsroom[at]stocktwits[dot]com