Microsoft Stock Slumps as Azure ‘Execution Issues’ Make Analysts Wary [Video]

Microsoft (MSFT) shares tumbled Thursday after the company’s weaker-than-expected fiscal second-quarter cloud growth prompted some analysts to lower their price targets for the Magnificent Seven stock. 

UBS maintained a “buy” rating but lowered its price target to $510 from $525, pinning the blame on Microsoft Azure, the tech giant’s cloud computing platform. The company’s projected current-quarter Azure growth was lower than hoped for, UBS analysts said.

“The near-term debate will be dominated by the ‘what is going on with Azure?’ question,” they wrote, with its growth “far worse than we expected.” Microsoft blamed the Azure disappointment on “execution issues” in the non-artificial intelligence segments of the segment, according to a conference call transcript provided by AlphaSense. 

All but one of the 19 brokers with ratings tracked by Visible Alpha have a “buy” or equivalent rating on Microsoft’s shares. Their consensus price target is about $516, a roughly 24% premium to Thursday’s close, which followed a 6% daily drop.

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