TLDR
Citi cut its Microsoft price target from $620 to $570, citing multiple compression across the software sector, not Microsoft-specific concerns. The Buy rating was maintained, with the $570 target still implying ~43% upside from the ~$397 current price. Microsoft reports fiscal Q4 results on July 29; analysts expect $4.24 EPS and $86.66B in revenue. Microsoft spent $30.88B on capex in Q3, up 84.4% year-over-year, weighing on the stock despite business growth.
MSFT is down over 20% year-to-date; FactSet shows 54 Buy ratings, 3 Holds, and zero Sells. Microsoft (MSFT) stock is trading around $397, down more than 20% year-to-date and nearly 23% over the past year.
That’s a rough stretch for a stock most investors expected to be riding an AI wave by now. Microsoft Corporation, MSFT
On July 15, Citi analyst Tyler Radke cut his price target on MSFT from $620 to $570. He kept the Buy rating. The new target still implies around 43% upside from current levels.
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The cut wasn’t a verdict on Microsoft’s business. Radke pointed to multiple compression hitting the broader enterprise software sector in 2026. His revised target reflects a 25x multiple on estimated 2028 earnings.
Citi’s product checks actually came back positive. Copilot adoption looks healthy.
Radke said Microsoft is well-positioned as companies start optimizing AI token spend and efficiency. Mizuho’s Gregg Moskowitz also trimmed his target, moving it from $515 to $490, while keeping an Outperform rating. He said his software checks were broadly good, with AI adoption tracking strong. Wells Fargo held its $625 target but flagged a mixed Q4 setup. The firm raised questions about cloud market share and the pace of capital spending.
Neither move rattled the broader analyst community much. FactSet shows 54 Buy ratings on MSFT, 3 Holds, and zero Sells. The analyst mean price target sits at $557.28.
Citi’s new $570 target lands just above consensus. The Capex Question
Microsoft spent $30.88 billion on capital expenditures in fiscal Q3, up 84.4% from the same period a year ago. Forbes estimates total fiscal 2026 capex at around $190 billion. That level of spending compresses margins and slows free cash flow growth in the near term. It’s a big part of why the stock has underperformed even as Azure keeps expanding. Bernstein’s mid-year CIO survey showed strong IT budget growth in 2026, which supports the demand side of the Azure story. But Wells Fargo’s cloud market share concern is a reminder that Microsoft needs to show it’s winning customers, not just building infrastructure.
What July 29 Needs to Deliver
Microsoft reports fiscal Q4 earnings on July 29 after the closing bell. The consensus estimates call for $4.24 in EPS and $86.66 billion in revenue. Azure growth numbers will get the most attention. Operating margin commentary will be a close second. Citi expects Q4 results to be solid. But Radke flagged that guidance for fiscal 2027 may be the harder pill to swallow. He’s expecting Microsoft to signal higher capex in Q1 and a cautious operating margin outlook.
MSFT has a seasonal history of closing July up around 3.64%, followed by roughly 1% in August. That doesn’t move fundamentals, but it’s a pattern traders tend to watch. Microsoft currently sits below its 100-day and 200-day moving averages, with the longer-term trend still pointing down. The July 29 print is the next real catalyst. Stop guessing and start investing with confidence.
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