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Microsoft Wins Plaudits From Analysts on Cloud Strength

'Nadella & Co. are seeing cloud tailwinds, and it’s still in early days of playing out,' Wedbush said.
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Microsoft  (MSFT) - Get Microsoft Corporation Report shares rose Monday after analysts offered generally positive commentary for the software giant ahead of its earnings report after the bell on Tuesday.

Dan Ives of Wedbush raised his price target to $270 from $260.

Microsoft recently traded at $228.31, up 1.04%. It has gained 14% over the past six months, trailing the 20% increase of the S&P 500, despite strong financial performance.

“[Microsoft Chief Executive Satya] Nadella & Co. are seeing cloud tailwinds, and it’s still in early days of playing out,” Ives said. For Microsoft, “this cloud shift and work-from-home dynamic looks here to stay, and the company stands to be a major beneficiary of this trend on its flagship Azure/Office 365 franchise over the coming years.”

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J.P. Morgan analysts said, “Deep-dive partner interviews suggest a healthy current demand environment for Cloud.” The analysts’ latest quarterly survey of Microsoft partners shows they expect their Microsoft practices to grow 10.8% in 2021.

“The feedback suggests a low double-digit growth runway remains possible for this year, more than double the rate of global IT budget growth and representing market share gains,” the JPM analysts said.

They have an overweight rating and $225.95 price target for Microsoft.

Meanwhile, Piper Sandler analysts have an overweight rating and a $245 price target for Microsoft. While the company faces tough fourth-quarter comparisons, “MSFT remains a core growth holding; buy on weakness,” they said. We remain bullish on the cloud model transition (40% of sales).”

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