stock will rally because of its strong position in the videogame industry, according to Evercore ISI.
The back story. Microsoft shares (ticker: MSFT) have risen nearly 30% this year amid investor enthusiasm over the company’s Azure cloud-computing business and its success in selling software subscriptions such as Office 365.
In April, the company reported better-than-expected fiscal third-quarter earnings results.
What’s new. Evercore ISI analyst Kirk Materne reiterated his Outperform rating on Tuesday, citing the company’s large opportunity in the gaming market.
“Microsoft is one of the few companies that have the potential to be both a leading content provider as well as a leading platform for gaming publishers,” he wrote. “Ultimately, we believe gaming can become the next major narrative as it relates to Microsoft’s long-term growth opportunity.”
Microsoft stock was down 0.5% to $131.49 on Wednesday, while the
The analyst cited the company’s strong presentation during this week’s E3 videogame conference, where Microsoft announced 60 games with 14 coming from the company’s internal Xbox game studios.
Materne is also optimistic over Microsoft’s cloud gaming offerings, where gamers can stream gameplay over the internet. Its XCloud service is slated for release this Fall.
Microsoft also said there were about 2 billion people in the world who play videogames.
Looking ahead. Materne reaffirmed his $140 price target for Microsoft stock.
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