Skip to main content
Publish date:

Microsoft Target Lifted; Wedbush Sees 'Picasso-Like Masterpiece Quarter'

Microsoft will deliver another Picasso-like masterpiece quarter, Wedbush analysts say.

Microsoft  (MSFT) - Get Microsoft Corporation (MSFT) Report will "deliver another Picasso-like masterpiece quarter," a Wedbush analyst said on Wednesday, as he raised the software giant's price target to $375 from $350.

Shares of the Redmond, Wash., company at last check were little changed at $308.15.

Analyst Daniel Ives, who has an outperform rating on the shares, said in a research note that Chairman and Chief Executive Satya Nadella and the company "will deliver another Picasso-like masterpiece quarter with numbers that should handily exceed Street estimates." 

Microsoft is scheduled to report fiscal-first-quarter earnings after the closing bell on Oct. 26.

Ives said his September checks for Microsoft have shown incremental strength again as the Azure cloud story is hitting its next gear of growth.

"We are seeing deal sizes continue to increase markedly as enterprise-wide digital transformation shifts are accelerating," the analyst said. 

Chief information officers are "all focused on readying their respective enterprises for a cloud-driven architecture," Ives said. 

TheStreet Recommends

And Microsoft is "poised to beat Azure whisper growth numbers of about 45% this quarter." 

Ives said the Office 365 price increase for 2022 was "a smart strategic poker move that could be another $5 billion+ incremental tailwind for Redmond in 2022, giving more confidence that numbers could continue to move higher."

Ives said Azure's cloud momentum "is still in its early days of playing out within the company’s massive installed base and the Office 365 transition for both consumer/enterprise is providing growth tailwinds over the next few years."

"Microsoft remains our favorite large-cap cloud play, and we believe the stock will move higher into 2022 as [Wall] Street further appreciates the cloud transformation story in Redmond," he said.

With workforces expected to have a heavy remote focus, Ives said the cloud shift is just beginning to take its next stage of growth globally.

"We believe this disproportionally benefits the cloud stalwart out of Redmond, as Nadella & Co. are so well positioned in its core enterprise backyard to further deploy its Azure/Office 365 as the cloud backbone and artery," he added.

On Tuesday, Microsoft said that preorders for its Xbox Mini Fridge will begin next week in the U.S., U.K. and Europe.