Microsoft price target cut at Citi on 'lower commercial PC numbers'
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Microsoft (NASDAQ:MSFT) is expected to continue the strong growth rates it has generated in the past several quarters, but Citi cut its price target to $376, noting it forecasts "lower commercial PC numbers" and the decline in earnings multiples for software stocks.

Analyst Tyler Radke kept his buy rating, but lowered his price target, stating that he expects overall growth durability to show "positive partner takeaways and reseller survey results," with particular strength in certain EA renewals and Office 365 and Dynamics, while Azure revenue growth could moderate amid tougher comps and seasonally weaker bookings.
"Stepping back, we believe Q2 results will continue to highlight the broad-based growth drivers at MSFT with sustained [Dynamics] revenue + op income growth at scale," Radke wrote in a note to clients. "We continue to see room for the stock to re-rate vs. the S&P500 given the durably higher revenue/FCF growth profile, which keeps MSFT as our top mega-cap pick."
Microsoft (MSFT) shares are up almost 2% in pre-market trading to $308.92.
Radke added that he does not see "much strength" for net new Azure deals, though he added there is still a "healthy expansion," noting that he expects Intelligent Cloud revenue to grow 26.4% year-over-year, which is ahead of consensus estimates of 25.1% year-over-year.
Earlier this week, Goldman Sachs said Microsoft's (MSFT) deal to buy Activision (NASDAQ:ATVI) for nearly $69 billion is all about the metaverse and expanding Microsoft's presence in the cloud.