Citi analysts recently raised their price target for Microsoft to $520 from $495 while maintaining a Buy rating on the stock. They noted that the latest news from OpenAI has been a positive indicator for Microsoft’s Azure platform, but expressed concerns that expenses might be underestimated. OpenAI has been making headlines for doubling its annualized revenue to $3.4 billion and expanding cloud capacity contracts with Oracle. While this growth is seen as beneficial for Azure, Citi analysts believe that consensus models may not fully account for the losses Microsoft could incur from its investment in OpenAI. They suggest that consensus earnings per share estimates might be overstated by $0.04 to $0.05 in the upcoming quarters. Overall, Citi slightly lowered its short-term EPS estimate by about 1% for the fourth quarter of 2024 and the first quarter of 2025 to $3.08, which is approximately 2% below the consensus estimate of around $3.15. The analysts increased their estimates for fiscal year 2027 and beyond.
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https://uk.investing.com/news/stock-market-news/microsoft-target-raised-at-citi-openai-headlines-a-positive-read-on-azure-432SI-3557414
