Microsoft May Face CapEx, Azure Skepticism in 4Q Print -- Market Talk

1551 ET - Microsoft's recent underperformance creates a solid set-up with limited downside risk ahead of the company's fourth-quarter earnings UBS analysts write in a note. Still, though they maintain a buy rating, they cut Microsoft's price target to $480 from $510, citing the possibility that Microsoft will raise its capital expenditures outlook while reaffirming rather than raising its guidance for Azure -- a combination of high spending and limited revenue upside that markets seem reticent to reward. Beyond CapEx and ROI debates, Microsoft may face pressure around its exposure to OpenAI and risks of open-source model displacement, as well as skepticism of its flagship productivity software business. "Bottom line, we remain BUY-rated but are more tactically balanced into this print," the analysts write. Shares are up 2% at $389.50. (elias.schisgall@wsj.com)

(END) Dow Jones Newswires

July 27, 2026 15:51 ET (19:51 GMT)