US Markets
Home›US Markets›Equities›Microsoft faces multiple compression as Azure growth s…
Microsoft faces multiple compression as Azure growth slips
Investors have pushed MSFT down 23% over 52 weeks and cut Citi’s price target to $570 from $620 as software valuations reset.
Microsoft is drawing renewed scrutiny as “multiple compression” pressures software-sector valuations and investors reassess growth expectations tied to cloud computing, according to analysis published by Yahoo Finance.
The iShares Expanded Tech-Software ETF (IGV) has fallen more than 20% from a recent peak, and the ETF’s 50-day moving average dropping below its 200-day average signaled a “death cross,” a technical shift that helped spur selling.
Within that backdrop, Microsoft shares fell after the company reported strong earnings that beat revenue and profit estimates, but investors focused on valuation and on Azure growth easing slightly from 40% to 39% as the core narrative gets repriced.
Citi analyst Tyler Radke cut Microsoft’s price target from $620 to $570 while keeping a “Buy” rating, following earlier reductions during the year, and the article notes Microsoft is down 23% over the past 52 weeks and 18.6% year-to-date, with the stock trading at a forward price-to-earnings ratio of 20.51 versus a 24.29 sector average.