Re-analyzing the current global economy due to the Middle East conflict, leading investment bank UBS recently cut Microsoft stock (NASDAQ: MSFT) price target by $90. That’s a steep haircut, indicating that MSFT could deliver gains, but not overdeliver profits to traders.
Despite the $90 slash in target, UBS maintains a ‘buy’ rating for Microsoft stock. This makes MSFT a must-watch equity despite receiving a correction in its target. While the price prediction is bullish, the upside swing is now capped.
Also Read: Why Jefferies Forecast on Microsoft Stock Hitting $675 Makes Sense
What Is UBS’s New Price Target For Microsoft Stock?
Investment bank UBS lowered Microsoft’s stock price target to $510 from its previous estimation of $600. That’s a reduction of $90, even after maintaining a ‘buy’ call for MSFT. Controversy erupted on Copilot after the company was accused of tricking millions of users into forced subscriptions to the product.
UBS Previous Price Target: $600
Current Price Target: $510
Reduction: $90
Microsoft stock is currently trading at $371, and the $510 target leads to an upswing of 37%. An investment of $1,000 could turn into $1,370 if the UBS forecast on MSFT turns out to be accurate. The previous target of $600 could have delivered returns close to 62%.
Why Did the World’s Largest Wealth Manager Cut $90 in Its Target?
UBS analyst Karl Keirstead lowered the target because he wants to see better financial results from Microsoft 365 and Copilot, but he still likes the stock at its current valuation. The world’s largest wealth manager wants clear financial returns from AI adoption and Copilot subscriptions before pushing the stock back to its previous target.
How Has the Equity Performed Recently?
Microsoft stock opened Thursday’s bell at $371 after slipping for three consecutive days in the charts. MSFT is among the least-performing Magnificent 7 stocks, plunging nearly 22% year-to-date. Traders who took an entry position in the equity this year are all underwater with losses. Even after the bearish sentiments, UBS remains positive on MSFT’s prospects.