Microsoft (MSFT) Reiterated Top Pick at Morgan Stanley After CIO Survey

October 13, 2020 8:06 AM

Morgan Stanley analyst Keith Weiss reiterated an Overweight rating and $245.00 price target on Microsoft (NASDAQ: MSFT) after conducting a CIO survey that showed an improving outlook into 2H20 and 2021.

The analyst reiterated his Top Pick indication, stating "Microsoft remains our top pick as CIO survey highlights favorable secular positioning and growing strength of already leading franchises. Broadly positive results from our most recent CIO survey highlight Microsoft's strong (and improving) positioning for key secular trends, especially as CIOs look for a modestly better outlook for 2H20 and into 2021. Key CIO spending priorities continue to revolve around Digital Transformation, Cloud, Security, Collaboration, and AI/Ml. Additionally, with work from home (WFH) looking to be a longer-term reality, projects like collaboration software are screening as more defensive. Considering the heavy emphasis management has been placing on Office 365 and Microsoft Teams in particular, we see this strategy paying dividends with survey results indicating Microsoft Teams becoming an even more dominant solution in the near term, as 60% of organizations expect to be standardized on Teams within the next year (vs 51% today and 40% in 3Q19)."

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Shares of Microsoft closed at $224.12 yesterday.

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