Microsoft jumps premarket as cloud surge, softer capex outlook fuel investor optimism

Shares of software and cloud giant Microsoft (MSFT.O) rise nearly 8% to $420.02 premarket

Co on Wednesday said it expects to keep generating cash through its just-started fiscal 2027 and gave a capital expenditure forecast below Wall Street estimates after an accounting change for data center leases

Barclays cuts PT to $512 from $545, maintains an “overweight” rating, says co is delivering better Azure and finally better Office growth, while also not surprising negatively on its capex outlook and free cash flow targets

“Given the different set-up for other main players (larger AI investments), we see a positive reaction” - Barclays

Co among the worst performers in the so-called “Magnificent Seven” group of mega-caps with an 18% drop so far this year, trailing cloud rivals such as Alphabet (GOOGL.O)

Azure revenue rises 43% in fiscal fourth quarter, topping analyst estimate of 39.98%

Sixty-three analysts rate the stock “Buy” on average; median PT is $550 - data compiled by LSEG

Up to last day’s close, the stock down nearly 19% YTD