Wedbush lowered its price target on MSFT to $475 from $550
Microsoft Corp (NASDAQ:MSFT) stock is taking a breather after a massive 10% rally on Wednesday. The tech heavyweight was last seen 1.6% lower premarket, following a cautious note from Wedbush, who lowered his price target on MSFT to $475 from $550, while maintaining its "outperform" rating. The firm cited rising tariff-related uncertainty, stating that the escalating “game of poker” between the U.S. and China presents near-term risks for companies with global supply chains -- including Microsoft.
MSFT’s sharp rebound yesterday snapped a five-day losing streak and is now facing off with the 50-day moving average. The bounce comes after the stock hit a low of $344.79 on Monday -- its lowest level since November 2023. Despite the recovery, MSFT remains down 7.4% year to date and continues to face technical resistance from several key moving averages.
Wall Street remains overwhelmingly bullish on Microsoft stock, with 43 of 46 analysts maintaining a “buy” or better rating on the stock. However, the optimism may be overextended, as the average 12-month price target of $498.01 represents a 29.5% premium to Wednesday’s close. This suggests that expectations could be due for a reset, if macro uncertainty continues to weigh on the tech sector.
With MSFT’s Schaeffer’s Volatility Scorecard (SVS) at just 27 out of 100, the stock has tended to underperform the volatility priced into its options. This low reading makes the security a compelling candidate for premium-selling strategies, particularly for traders expecting muted movement in the near term.