Wedbush Keeps Outperform Rating on Microsoft Ahead of Q4 Earnings

Wedbush maintained its Outperform rating and $600 price target on Microsoft (NASDAQ:MSFT) ahead of the company's fiscal year 2025 fourth quarter results. The firm expects "robust" Q4 results, with Nadella & Co. likely to report good news.

Wedbush Securities has maintained its Outperform rating and $600 price target on Microsoft (NASDAQ:MSFT) ahead of the company's fiscal year 2025 fourth quarter results. The firm expects "robust" Q4 results, with Nadella & Co. likely to report good news. Microsoft's strong performance in its cloud and AI segments, driven by the growth of its Azure platform, has been a key driver of the company's success. Despite recent challenges such as the shutdown of General Motors' Cruise robotaxi initiative and cost-cutting measures, Microsoft continues to demonstrate resilience and a focus on long-term growth.

In the third quarter of fiscal year 2025, Microsoft reported a 20% year-over-year increase in cloud revenue, with a significant portion of this growth attributed to its AI services. The company's gross profit increased by 14% year-over-year, driven by strong demand for its cloud and AI products. Additionally, Microsoft's gaming segment experienced a 44% growth, largely driven by its acquisition of Activision and the expansion of its Xbox content and Bethesda's Starfield.

Analysts at Wedbush expect Microsoft to maintain its upward trajectory, driven by sustained demand for its cloud services and AI solutions. The company's $80 billion cash reserve, which is dedicated to investments in cloud and AI infrastructure, provides a strong foundation for future growth. However, the firm also notes that Microsoft faces risks such as tariff uncertainties and supply chain disruptions, which could impact its financial performance in the future.

Overall, Wedbush's outlook on Microsoft is positive, with the firm expecting the company to continue to generate robust results in the fourth quarter of fiscal year 2025. The Outperform rating reflects the firm's belief that Microsoft's strong fundamentals and strategic initiatives position it well for long-term growth.

References:

[1] https://247wallst.com/investing/2025/07/24/microsoft-nasdaq-msft-stock-price-prediction-for-2025-where-will-it-be-in-1-year/