Microsoft Shares Fall, Stifel Cuts Target to $392 as Copilot Lags
Microsoft shares have declined 18% year-to-date and over 19% since fiscal Q2 results, prompting Stifel to cut its rating from Buy to Hold and slash its price target to $392 from $540 due to cloud growth disappointments. Jim Cramer pointed out Copilot’s 1.5 million subscriptions against a 1.5 billion user base and urged Microsoft to revamp its AI offerings as Azure faces supply constraints and intensifying competition from Google Cloud and Anthropic.
1. Stock Performance and Stifel Downgrade
Microsoft shares have fallen 18% year-to-date and over 19% since fiscal second-quarter results, leading Stifel to downgrade its rating from Buy to Hold and cut its price target from $540 to $392 as Azure growth missed investor expectations.
2. Jim Cramer’s Copilot Concerns
Jim Cramer criticized the uptake of Copilot, noting just 1.5 million subscriptions compared with a 1.5 billion Microsoft user base, and called for a major AI strategy refresh to regain momentum.
3. Azure Growth and Capacity Plans
Azure revenue grew 39% year-over-year but remains constrained by supply limitations and mounting competition from Google Cloud and Anthropic, prompting Microsoft to plan an 80% increase in AI capacity by June 2026 to alleviate bottlenecks and support growth.