Microsoft seeing 'steady' cloud deal flow, Activision deal likely to close: Wedbush
Jean-Luc Ichard

Investment firm Wedbush Securities said on Friday that Microsoft (NASDAQ:MSFT) has seen a "steady" flow of cloud computing deals since the weakness in December, while adding the tech giant is likely to close its deal for Activision Blizzard (NASDAQ:ATVI) despite negativity surrounding it. 
Analyst Dan Ives, who has an outperform rating on Microsoft (MSFT), noted more recent checks on Microsoft (MSFT) than in recent weeks, as conditions have improved for the Satya Nadella-led company.
"While the macro is clearly a concern for CIOs looking to navigate an uncertain IT spending environment, many larger cloud platform deals have been given the green light for Redmond which is a positive so far this quarter and for 2023," Ives wrote in a note to clients. Ives raised his per-share price target on Microsoft (MSFT) to $290 as a result.
Ives added that cloud budgets for customers are "mostly in place" and any signs of deals being pushed out have "stabilized" over the past month.
The analyst also noted that while Azure growth has slowed from levels seen in the past, it is tracking ahead of the low 30% growth target it set and is likely seeing some share gains.
There are some concerns that cloud deals in the financial space could be smaller-than-expected, given higher scrutiny than in the past, but that is being offset by strength from federal spending, as competitors Amazon (AMZN), Google (GOOG) (GOOGL), Oracle (ORCL) and IBM (IBM) are seeing a "surge" in federal activity.
With regards to the deal for Activision (ATVI), Ives added that despite the recent regulatory worries, the deal will "ultimately prevail" in both the U.S. and Europe, with the Call of Duty maker coming into Microsoft's (MSFT) coffers by late summer.
On Tuesday, Microsoft (MSFT) said it had signed deals with Nintendo and Nvidia to bring Xbox and Activision (ATVI) games to their respective platforms.