Microsoft Stock (NASDAQ:MSFT)
Wedbush Securities, an investment company, said in a research note that it published on Tuesday that their checks into the cloud computing segment of Microsoft (NASDAQ:MSFT) were “steady” and that growth moving into the new year was “better than anticipated.”
Citing recent interactions with clients and partners, analyst Dan Ives, who recommends outperforming Microsoft stock, observed that growth for Azure, Microsoft’s cloud arm, was more solid than some negative critics have suggested.
“While Azure growth has certainly decelerated in the field,” Ives said in a letter to clients for Microsoft, “we expect MSFT should be able to meet its 37% Azure growth goal (constant currency) in the December quarter when Redmond releases results in late January.”
Ives noted that at least 90% of significant deal activity for Azure and Office 365 is “still on track” after meeting with partners of Microsoft (MSFT) and that any slowdown or push-out is expected to be “small” in scale. This was his assessment after speaking with partners of Microsoft.
There is a possibility of some give and take, as transactions in the financial sector may begin to be scaled down due to data center projects being slowed down or delayed, while government transactions are seeing the reverse trend. Ives said that companies such as Microsoft, Amazon, Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Oracle, and IBM are still seeing a “surge” of deal activity from Washington moving into 2023. This includes the recent $9 billion cloud purchase with the Pentagon.
“While it’s easy right now to cry fire in a packed theater on [Microsoft’s] stock with the tech sector being enemy #1 on the Street, we think this is not the time to move away from Redmond, which is still in the middle innings of its cloud transformation with Azure and Office 365 leading the way,” Ives stated. “We believe there is a better time to shift away from Redmond, which is still in the middle innings of its cloud transformation with Azure and Office 365 leading the way.
Wells Fargo said one week ago that Microsoft stock is one of the firm’s top picks for business software equities for the year 2023.
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