Key Takeaways Citi reduced MSFT’s price target to $570 from $620, suggesting potential upside of 43% from present trading levels Wells Fargo lowered its target to $625 while Mizuho dropped to
Microsoft (MSFT) approaches its fiscal fourth-quarter earnings report scheduled for July 29 amid downward revisions from three prominent Wall Street investment firms, although each continues to recommend the stock.
Citi analyst Tyler Radke revised his price objective downward to $570 from his previous $620 estimate. Wells Fargo’s Michael Turrin adjusted his forecast to $625 from $650. Meanwhile, Mizuho’s Gregg Moskowitz brought his target down to $490 from $515. Importantly, each firm retained its Buy recommendation.
MSFT stock has experienced roughly a 16% decline since the start of the year and currently sits beneath both its 100-day and 200-day moving average thresholds. Shares managed to close Wednesday’s session in positive territory despite the target reductions.
The downgrades stem primarily from valuation compression affecting the broader enterprise software sector throughout 2025. Radke’s updated projection incorporates a 25x earnings multiple applied to projected 2028 results.
The more substantial worry reflected across all three analyst reports centers on capital allocation. Microsoft continues investing heavily in artificial intelligence infrastructure, prompting questions about future profit margin trajectories.
Turrin from Wells Fargo characterized the upcoming Q4 results as having a “mixed” setup. His analysis focuses on capital deployment intensity and cloud computing market positioning, though he anticipates Azure will deliver results slightly above expectations thanks to expanded capacity and consistent enterprise customer demand.
He increased his long-term capital expenditure projections and highlighted escalating costs per gigawatt as Microsoft advances through its Vera Rubin data center expansion phase. Notwithstanding margin compression and recent workforce reductions, he continues forecasting double-digit earnings per share growth through fiscal 2027.
Mizuho’s Moskowitz reported that Azure performance indicators appeared “good” and demonstrated more strength compared to March data points. His forecast calls for Azure results to exceed guidance modestly, with no concerning signals regarding the fiscal Q1 outlook.
He also observed early signs of improving Copilot user adoption and projects solid Intelligent Cloud segment revenue. Regarding the consensus capital spending estimate hovering around $230 billion for fiscal 2027, he cautioned this figure might prove insufficient given accelerating investments from AWS, Google, and Meta.
Citi’s Radke anticipates another modest Azure performance above expectations alongside more robust-than-typical Copilot subscriber additions. His forecast suggests a fiscal Q1 Azure growth guidance range of 40–41%, supported by advancing data center construction projects.
Radke elevated his Copilot usage estimates while reducing gaming revenue projections reflecting recent organizational restructuring. He identifies emerging benefits from E7 pricing adjustments and recent staff reductions that should materialize in fiscal 2027 results.
Microsoft demonstrates a historical tendency to finish July with average gains of 3.64%, typically followed by approximately 1% appreciation in August. This seasonal behavior provides additional support for a near-term positive thesis.
Analysts project the company will deliver $4.21 in earnings per share for the upcoming quarter, representing more than 15% growth compared to the prior year period.
The collective Wall Street perspective maintains a “Strong Buy” designation, derived from 34 Buy ratings, one Hold, and one Sell recommendation. The mean price objective of $559.63 indicates approximately 41% upside potential from current trading levels.
The earnings announcement is slated for July 29.
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