Microsoft Stock Slumps as Azure 'Execution Issues' Make Analysts Wary

Core Insights - Microsoft shares experienced a significant decline following weaker-than-expected fiscal second-quarter cloud growth, leading analysts to adjust their price targets downward [1][4] - UBS analysts attributed the decline primarily to Microsoft Azure's performance, which fell short of expectations, prompting a price target reduction from $525 to $510 while maintaining a "buy" rating [1][2] - The consensus among analysts remains positive, with 18 out of 19 brokers maintaining a "buy" or equivalent rating, and a consensus price target of approximately $516, representing a 24% premium over the recent closing price [3][4] Azure Performance - Analysts are focused on the underperformance of Azure, with growth described as "far worse than expected," attributed to "execution issues" in non-AI segments [2] - Despite the Azure setback, there are signs of optimism in AI, as Microsoft's Azure AI Foundry has reportedly gained over 200,000 monthly users within two months [3] Analyst Ratings and Price Targets - Bank of America continues to view Microsoft as a "top pick," maintaining a price target of $510 and revising its 2025 earnings per share estimate upward, citing Microsoft's strength in AI applications and infrastructure [4] - Morgan Stanley has adjusted its price target from $540 to $530 while reiterating an "overweight" rating on Microsoft shares [4]