Prior to MSFT earnings yesterday almost every single analyst had BUY ratings for the stock and like 50 % upside on their price targets. Post earnings the stock dipped but almost all analysts raised their price targets even higher and reiterated their price targets.
Now, it’s possible the stock price will actually react positively to the company’s earnings as analysts suggest it should as the market fully digests the results. Maybe the 4 % dip yesterday will be equalized today who knows.
But, what are analysts and price targets worth if they are so clearly wrong about the market? I guess short-term traders were spooked by the massive increase in CapEx? And analysts are thinking long term? In my opinion Microsoft can't build data centers fast enough to meet demand but that’s kind of a ‘good problem to have’? I suppose this means Azure growth is currently capped by physical hardware limits rather than a lack of customers.
Are analysts and price targets completely irrelevant? MSFT
byu/lies_are_comforting inStockMarket
Posted by lies_are_comforting
6 Comments
Market can be irrational to long term value in short term timescales.
It’s why buy and hold stock picking can work.
Price targets are for a 12 month period, not next week.
I remember my first time trading individual names.
Yeah, they are.
No. Analysts outlooks don’t mean anything, just buy something you have done research into and have conviction in and recheck every quarter or so. Just remember they have an incentive to tell you that info, if it’s free you’re the product.
I’m starting another short position on MSFT actually by eod tmrw. Copilot is the single worst product I’ve ever used in any workflow (maybe outside of NOW) and the adoption level is only because it is bundled into package deals, they have little to no real innovation, very earnings call we hear there is demand but it hasn’t shown and they can’t meet it, G42 deal is cope, Middle East investment isn’t going to workout imo… exacerbated by the fact UAE is leaving OPEC and region disruptions will get worse etc etc etc could go on.
My opinion should also be moot to you, just take in multiple different views and find what you think is correct.
Because markets want FCF and profitability now, not jam tomorrow