MSFT Stock Slides 4.5% — Microsoft Price Target Revision By Stifel And Xbox Pricing Changes In Focus

• Stifel lowered its price target on Microsoft, citing revised and weaker-than-expected margin assumptions for FY27.
• Apart from raising Xbox prices globally, Microsoft is also discontinuing its 2 TB Xbox model as part of the product lineup reset.
• The Kobeissi Letter, which provides market commentary, said in a post on X that “AI-induced price hikes have begun.”

Shares of Microsoft Corp. (MSFT) fell nearly 4.5% during Thursday afternoon’s trading session. The decline came after Stifel revised its outlook on Microsoft amid updated profitability expectations, alongside the company’s announcement of higher Xbox prices driven by rising memory chip costs.

The MSFT stock ended Thursday's session down 3.66%. In after-hours trading, the shares pared some of those losses and were up 0.22% at the time of writing.

MSFT Price Target Cut By Stifel

Stifel lowered its price target on Microsoft to $400 from $415, while maintaining a Hold rating on the stock. The revised target still implies around 9% upside from MSFT’s Wednesday’s close.

The firm said following Oracle’s (ORCL) recent earnings and gross margin guidance, it reviewed Microsoft’s FY27 sell-side gross margin estimates and said they appear too high, reported TheFly.

According to data from Koyfin, 53 of the 56 analysts covering MSFT rate it ‘Buy’ or ‘Strong buy,’ while 3 rate it ‘Hold.’ The 12-month average target on the stock is $561.11, suggesting about 42% upside from the latest close.

MSFT Raises Xbox Prices Globally

Microsoft said Xbox console prices will increase worldwide starting August 1, with 512 GB models going up by $100 and 1 TB versions rising by $150. The company also confirmed it will discontinue its 2 TB model as part of a broader lineup change.

Microsoft said in a blog post that storage and memory costs have surged sharply, forcing the pricing move despite months of negotiations with suppliers. The company added that console storage and memory prices have risen more than 2.5 times, with expectations of further increases ahead.

Microsoft said that it had previously raised Xbox prices in October and had hoped further increases would not be necessary. But ongoing supply constraints are impacting the entire consumer electronics industry, with consoles particularly affected.

Earlier in the day, Apple also raised prices across its MacBook and iPad lineup, citing higher memory and storage costs amid strong AI-driven demand. CEO Tim Cook said the price increases were becoming unavoidable despite efforts to shield customers.

‘AI-Induced’ Pricing Talk Emerges

Responding to Microsoft’s Xbox price hikes and Apple’s higher MacBooks and iPad prices, The Kobeissi Letter, which provides market commentary, said in a post on X on Thursday that “AI-induced price hikes have begun.”

The post also detailed updated Xbox pricing, stating that the Series S 1TB has risen $150 to $599, the Series X 1TB has increased $150 to $799, the Series S 512GB has moved up $100 to $499, and the Series X 1TB Digital edition has risen $150 to $749.

MSFT Stock: Stocktwits Retail Views

On Stocktwits, retail sentiment for MSFT was ‘bullish,’ with message volume beinbg ‘high.’ Over the past 30 days, the message volume for MSFT stock surged by 341% while the watcher count rose by 0.6% during the same period.

The MSFT stock has lost nearly 27% year-to-date. 

Also Read: AAPL Stock Slides Over 6% On Mac And iPad Price Hikes — Why Gene Munster Calls It An ‘Overreaction’

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