NEW YORK, Jan 22, 2026, 05:19 ET — Premarket
- Shares of Microsoft fell 2.3% Wednesday following another wave of target price reductions on Wall Street
- Analysts will focus on Azure cloud expansion and AI-driven capacity limits ahead of the Jan. 28 earnings report
- Reuters reported that Microsoft intends to sell its stake in India’s PhonePe through the payments company’s upcoming IPO
Microsoft shares dropped 2.3% on Wednesday, closing at $444.11, following Rothschild & Co Redburn’s decision to lower its price target to $450. The new target reflects the analyst’s forecast for the stock’s value over the coming year. TipRanks
The timing is crucial as Microsoft is set to release fiscal second-quarter results next week. Traders are gearing up for fresh insights on Azure’s growth and how much the company is spending to back AI workloads — those intense computing tasks behind training and running AI models. Investing.com
The stock is emerging from a volatile period in global markets, where investors have reacted sharply to changing trade news that has swung risk appetite up and down. Reuters
Alex Haissl at Redburn maintained a Neutral rating despite lowering the target.
Citi cut its price target to $660 from $690 but maintained its Buy rating, citing a reseller survey and partner data that showed a “more mixed” outlook for the quarter. The firm still expects Azure to outperform but lowered its non-Azure projections due to a softer PC forecast. TipRanks
Mizuho cut its price target to $620 from $640 but kept an Outperform rating, noting channel checks were “generally good” and AI adoption remained “very strong.” The firm did flag that some clients seemed less eager with end-of-year budget spending than usual. TipRanks
TD Cowen lowered its price target to $625 from $655 but maintained a Buy rating. The firm noted checks showing demand for GPU and CPU infrastructure remains stable to stronger. They added roughly “2 points of upside” to their 37% constant-currency Azure growth forecast, excluding currency swings. Still, they cautioned that capacity limits might keep the stock stuck in a range for now. TipRanks
Investors are zeroing in on three key points: Azure’s growth trajectory, the availability of computing capacity, and if Microsoft’s spending continues to outpace what the market is willing to absorb.
A quieter story is unfolding: Reuters says Microsoft intends to completely sell off its stake in India’s PhonePe amid the payments company’s IPO filings. The move would involve a secondary sale, meaning Microsoft is offloading existing shares rather than PhonePe issuing new ones. Reuters
But there’s a risk that demand signals and supply won’t align neatly. If Microsoft’s guidance indicates cloud growth is still capped by capacity constraints, or if another round of tariff-driven volatility rattles big tech, the stock could stay under pressure despite beating headlines. Reuters
Microsoft’s fiscal Q2 earnings drop Wednesday after the market closes, with the conference call set for 2:30 p.m. Pacific. CEO Satya Nadella and CFO Amy Hood will lead the discussion. news.microsoft.com
