On April 8, we noted: “Microsoft has been one of the hardest-hit names in tech, down roughly 22% year-to-date. The stock now trades at about 22x forward P/E — a level not seen since 2016. For the first time since 2015, Microsoft is trading at a discount to the broader S&P 500. Technically, the stock now sits at strong support dating back to April. If it can hold that, despite the war-fueled market pullback, we’d like to see the tech giant rally back to $460 initially.”
Today, the tech giant is now up to $393 and quickly gaining momentum ahead of earnings, and on news that it’s finalizing long-term memory supply agreements with SK Hynix.
“The agreements come as AI hyper scalers seek to guarantee sufficient memory supplies for their data center expansion plans amid a supply squeeze and rapidly climbing prices. For these companies, securing supply has become the primary concern, with price considerations taking a secondary role,” as noted by Investing.com.
In addition, Goldman Sachs now has a buy rating on the tech giant with a $600 price target. According to the firm, Microsoft’s growth story remains intact, and the risk is already priced in. The firm also says Microsoft is the best compounder across AI products because it earns across AI compute, platforms, and applications.
Sincerely,
Ian Cooper
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