- UBS painted a cautious picture of Microsoft Corp (NASDAQ:MSFT) and Alibaba Group Holding Ltd (NYSE:BABA).
- UBS analyst Karl Keirstead kept a Buy rating on Microsoft after speaking with several industry checks and Microsoft IR.
- Keirstead saw the Office 365 juggernaut as likely to begin to decelerate given high penetration and the pandemic/work-from-home benefit starting to fade.
- Also Read: Here's How Alibaba Scooped Bullish Rating Amid Surging COVID Cases, Regulatory Crackdown
- Shares of companies in the broader technology sector traded lower amid a rise in U.S. Treasury yields and also in anticipation of expected Fed rate hikes.
- UBS analyst Jerry Liu lowered the price target on Alibaba to $140 from $150 (37% upside) but kept a Buy.
- Liu slashed his Q4 estimates to reflect the incremental Covid-19 related headwinds and the regulatory and macro impacts last year. Still, he expects the company to cut costs this year, focusing on efficiency improvements in its domestic lower-tier city, community group buying, and on-demand delivery initiatives.
- Any positive outcome on ADR listing negotiations between regulators and shifting Alibaba's Hong Kong listing to a primary one could be additional catalysts.
- Price Action: MSFT shares closed lower by 3.94% at $285.50 on the last check Monday.
