After the volatility in the markets product of the commercial war, Bank of America He reiterated his purchase rating for Microsoft and assured that the technological giant continues “Better positioned for the AI cycle”within what are the “Seven magnificent.”
According to Bafa, the activity of agreements of Microsoft In the third quarter of fiscal year 2024 he was in line with expectations, reflecting the performance of the previous quarter. The Wall Street firm expects income to be aligned with its estimate of US $ 68.2 billion, which represents an increase of 10.3% year -on -year.
It is projected that The weakest US dollar has a negative impact of 100 basic points on year -on -year growth, It also represents an improvement with respect to the 200 basic points previously indicated.
Growth expectations, according to Bofa
In the segment of the cloudit is predicted that the growth of Azure It will comply with Bofa’s projections, with an interannual growth of 31% in constant currency, of which, 14 percentage points are attributed to AI.
“In Azure, the partners generally pointed out a stable activity with hybrid cloud projects (Azure Arc) and modernization of applications by promoting most of the consumption,” analysts wrote Brad Sills and Carly Liu in the note.
It is also expected that The Productivity and Business Processes segment (PBP) is held in line with the Bofa forecast of US $ 29.53 billionassuming 15% growth in constant currency in commercial income of Office.
Despite not there are significant signs of deceleration in the consumption or growth of the portfolio, Bofa adjusted its Azure growth estimate for the fourth quarter to 30.5% in constant currency, from 31.5%due to possible winds against macroeconomic.
In addition, although rumors circulated on the reduction of capital expenses (Capex) of Microsoft, LThe analysts believe that the company is strategically reassigning the geographically capex and maintains its commitment to the creation of long -term capacitywith CAPEX estimates of $ 87 billion for AF25 and $ 97 billion for AF26.
The new target price of Bofa of US $ 480 reflects a 36x multiple on the estimated free cash flow by 2026, a slight decrease from the previous 38x multiple.
The bank emphasizes Microsoft’s advantageous position in the AI cycle in applications and infrastructurejustifying a premium assessment compared to the growth group at a reasonable price (GARP).
Source: Ambito
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