A Wall Street analyst lowered his fiscal 2025 estimate for Microsoft Azure revenue, citing slower uptake of Copilot AI services. Microsoft stock dipped Thursday.
In a client note late Wednesday, Oppenheimer analyst Timothy Horan reiterated his outperform rating on Microsoft stock with an 18-month price target of 500. However, he changed his estimates for Azure cloud computing sales and capital expenditures.
On the stock market today, Microsoft stock slid a fraction to close at 431.31.
Horan cut his Azure estimate for fiscal 2025 "mostly due to approximately $5 billion less AI revenue than we were assuming at the beginning of the year."
He added, "We believe the uptake of Copilots is slightly below expectations for Microsoft and AI build-outs are also a bottleneck."
Microsoft Stock Near A Buy Point
Horan predicted Azure revenue in fiscal 2025 of $95.3 billion, up 30.3% from the prior year. Microsoft's fiscal year ends June 30. Horan forecast Azure sales rising 29% to $123 billion in fiscal 2026.
He lowered his estimate for Microsoft's capex in 2025 and 2026 but increased his estimates for the following two years.
Microsoft stock is in a cup-with-handle base with a buy point of 441.85, according to IBD MarketSurge charts.
Further, Microsoft stock is in the IBD Long-Term Leaders Portfolio.
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