Shares of Microsoft Corp (MSFT) plummeted nearly 4.5% during Thursday’s trading session after Stifel lowered its price target to $400, citing concerns over the company’s FY27 sell-side gross margin estimates being too high. The decline came as Microsoft announced higher Xbox prices driven by rising memory chip costs.
The company stated that it had previously raised Xbox prices in October and was forced to increase them again due to supply constraints in the consumer electronics industry. This news, alongside Apple’s announcement of Mac and iPad price hikes, led Stifel to revise its outlook on Microsoft amid updated profitability expectations.
Despite this, analysts remain optimistic about MSFT, with 53 out of 56 analysts rating the stock ‘Buy’ or higher, implying a 53% upside from the current price. The company has explored restructuring its Xbox business and is considering integrating China’s low-cost DeepSeek models into its Copilot platform to bolster its position.
However, traders on Stocktwits have expressed bearish sentiments towards MSFT, citing the stock’s underperformance compared to semiconductor stocks like Micron. The company’s year-to-date decline of nearly 27% and its lowest PE ratio since late 2016 have raised concerns about a near-term rebound.
Source: https://stocktwits.com/news-articles/markets/equity/msft-stock-slides-amid-stifel-price-target-cut-and-xbox-price-hikes/cZ1GskER7XZ