Goldman Sachs Maintains Buy Rating on Microsoft, PT Down to $50 from $57.

Goldman Sachs Maintains Buy Rating on Microsoft, PT Down to $50 from $57.

Goldman Sachs has revised its target price for Microsoft Corporation (MSFT) downwards to $50 from $57, while maintaining a "Buy" rating on the tech giant. The decision reflects recent market conditions and the company's performance, particularly in the face of macroeconomic headwinds and geopolitical uncertainties.

The latest move by Goldman Sachs aligns with the broader trend of investors returning to large US technology stocks, as evidenced by the Bank of America's Global Fund Manager Survey [1]. The survey reveals that 45% of participating managers identified "long Magnificent 7" as the most crowded trade in August, with Microsoft being a key member of this elite group. This resurgence is attributed to a strong rebound from the tariff-driven selloff in April and robust quarterly earnings, which have reassured markets about the tech sector's ability to sustain profitability despite macroeconomic challenges.

The shift in target price is also influenced by the broader energy sector dynamics. Hedge funds have been realigning their energy strategies, shifting to net short positions on oil stocks while reducing their short positions on solar equities [2]. This strategic pivot reflects a perception that solar and wind valuations have stabilized, and concerns over the oil sector's supply-demand balance. The trend is linked to OPEC+ members increasing output to defend market share, which has historically led to downward pressure on prices.

Goldman Sachs' revised target price for Microsoft underscores the ongoing cautious positioning among investors, despite improved market sentiment. The survey data indicate that while risk appetite has improved, positioning remains more cautious than late last year, with only 5% of respondents expecting a "hard landing" scenario. This cautious stance is reflected in the reduced target price, which acknowledges potential risks while still recognizing the tech giant's strong fundamentals.

The article concludes by noting that while the energy sector's strategic pivot and the broader market sentiment provide context for Goldman Sachs' decision, the investment thesis remains focused on Microsoft's ability to deliver growth and profitability. The company's strong earnings momentum and the growing belief in a softer economic adjustment support the "Buy" rating, despite the downward revision in target price.

References:
[1] https://www.fastbull.com/news-detail/big-tech-dominates-as-long-magnificent-7-reclaims-4339100_0
[2] https://www.bloomberg.com/news/articles/2025-07-02/hedge-funds-shift-energy-bets-as-oil-outlook-weakens-and-renewables-gain-momentum