Why Two Major Analysts Are Pumping The Brakes On Microsoft Before Earnings

Citi and Mizuho both cut their Microsoft price targets to $570 and $490 respectively, but maintained their bullish Buy and Outperform ratings ahead of the July 29 fiscal Q4 report. Microsoft's AI business surpassed a $37 billion annual revenue run rate, up 123% year-over-year, while quarterly capex surged 84% to $31 billion, raising investor concerns about capex digestion.

Why it matters: MSFT has fallen 20% year to date, and investors will focus heavily on Q1 capex guidance during the earnings report as much as headline earnings results.