Microsoft’s stock has declined sharply in early June, falling 10% over the past week amid a broader tech sell-off that has also impacted the Nasdaq Composite. Despite the drop, Wall Street analysts maintain a bullish outlook, with Wells Fargo raising its price target to $650 and Citizens initiating coverage with an “Outperform” rating. The average analyst price target of $557.64 suggests significant potential upside from current levels, though concerns over AI strategy and potential Federal Reserve interest rate hikes present headwinds for the tech giant.
Shares in Microsoft have fallen 10% in the past week as AI and technology stocks experience a significant pullback. The stock is down roughly 7% in June, underperforming the broader S&P 500 and Nasdaq Composite indices.
Despite the recent dip, Wall Street firms maintain positive ratings on Microsoft. On June 1, Wells Fargo analyst Michael Turrin increased the price objective to $650 and kept an “Overweight” rating. However, the firm believes that Microsoft is better positioned at the software layer than the market is currently realizing.
Citizens has also initiated coverage of Microsoft with an “Outperform” rating and a $550 price target. Based on data from 37 analysts, the average 12-month price target is $557.64, with a high forecast of $680 and a low of $400.
Economic resilience could lead the Federal Reserve to prioritize combating inflation with interest rate hikes. Growth stocks like Microsoft tend to perform better in a low-interest rate environment, making potential hikes a bearish risk.
