UBS analysts have given a bullish ranking to Microsoft (MSFT) stock, signaling that the shares may be a solid choice to invest in among the Magnificent-7. Despite navigating a tough tech stock market with others declining, UBS maintains a strong outlook on the Windows developer. Currently, US equity indexes, particularly tech stocks, are facing declines due to broader market trends and geopolitical tensions, contributing to a challenging landscape for Microsoft. Furthermore, tariff concerns are sparking again, sending companies like Apple and Nvidia downward.
However, UBS analysts have a Buy rating on MSFT. Indeed, UBS anticipates significant cloud revenue growth due to strategic pricing adjustments. Additionally, analysts project a robust 14% revenue growth for FY26E, supported by Microsoft’s strong AI positioning. “Last week, Microsoft announced a new pricing and licensing model that partners described as ‘significant’ and ‘very aggressive,’ prompting us to explore the change in detail,” UBS analysts wrote in a note to clients. The bank said Microsoft is “standardizing pricing across most of its customer tiers on EA contract types, with partners consistent in their feedback that this results in a net price increase.”
Furthermore, UBS estimated these products represent about 55% of revenues. Government and education contracts, as well as on-premise products, are exempt. According to partners cited by UBS, the net price increase ranges between “3-6% to 10-14%.” The banks’ analysts kept a $650 price target and Buy rating on MSFT unchanged, citing the company’s strong positioning in artificial intelligence. “We still view the stock as being reasonably priced given how levered Microsoft is to the AI phenomenon.”
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At press time, Microsoft MSFT stock is down for the second straight day, falling 1%. In the last five days, MSFT is down 3%. At $506, MSFT is trading near the top of its 52-week range and above its 200-day simple moving average. Analysts at CNN suggest that MSFT will perform well in the next 12 months, even outperforming expectations from Wall Street.
Out of 61 analysts’ forecasts by CNN, none of them suggest selling MSFT stock. In fact, 95% of the analysts suggest now is the time to buy into MSFT. The highest forecast for Microsoft shares over the next 12 months pits the stock at $700, a 38% climb from current prices. Alternatively, the lowest forecast only suggests a 4% dip to $485.00. As CNN and UBS reiterate, now may be a solid time to invest in a Mag-7 stock like Microsoft.