Here are Thursday's biggest analyst calls: Nvidia, Tesla, Apple, Microsoft, Meta, CoreWeave & more
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CNBC
an hour ago
- CNBC
Microsoft's gutting of discounts for some clients likely baked into guidance, analyst says
Microsoft said last week that it plans to stop providing discounts on enterprise purchases of its Microsoft 365 productivity software subscriptions and other cloud applications. Since the announcement, analysts have published estimates on how much more customers will end up paying. But for investors trying to figure out what it all means to Microsoft's financials, analysts at UBS said the change is already factored into guidance. "In our view, it is safe to assume that the impact of the pricing change" was included in Microsoft's forecast, the analysts wrote in a report late Tuesday. They have a buy rating on the stock. Microsoft didn't respond to a request for comment. Microsoft's disclosure, on Aug. 12, came two weeks after the software company, it its fiscal fourth-quarter earnings report, issued a forecast that included double-digit year-over-year revenue growth for the new fiscal year. The shares rose 4% after the report. Microsoft said in its blog post announcing the pricing change that, "This update builds on the consistent pricing model already in place for services like Azure and reflects our ongoing commitment to greater transparency and alignment across all purchasing channels." The change applies to companies with enough employees to get them into price levels known as A, B, C and D. It goes into effect when organizations sign up for new services or renew existing agreements, beginning on Nov. 1. Jay Cuthrell, product chief at Microsoft partner NexusTek, said customers will see price hikes of 6% to 12%. Partners are estimating an impact as low as as 3% and as high as 14%, UBS analysts wrote. Microsoft 365 commercial seat growth, a measurement of the number of licenses that clients buy for their workers, has been under 10% since 2023. Microsoft is aiming to generate more revenue per seat by selling Copilot add-ons and moving some users to more expensive plans. Expanding that part of the business is crucial. Most of Microsoft's $128.5 billion in fiscal 2025 operating profit came from the Productivity and Business Processes unit, and about 73% of the revenue in that segment was from Microsoft 365 commercial products and cloud services. Some customers could agree to pay Microsoft more to keep using the applications rather than moving to alternative services, said Adam Mansfield, practice lead at advisory firm UpperEdge. They may also lower their commitments to Microsoft in other areas, such as Azure cloud infrastructure, Mansfield said. One way companies could potentially pay lower prices with the disappearance of discounts is by buying through cloud resellers instead of going direct, said Nathan Taylor, a senior vice president at Sourcepass, an IT service provider that caters to small businesses. Sourcepass hasn't gotten many leads as a result of Microsoft's change yet, Taylor said. "It takes a while for that information to disseminate to the industry at large," he said. Microsoft shares are up 20% this year, while the Nasdaq has gained about 10%.
Yahoo
2 hours ago
- Yahoo
Bloom Energy (BE) Stock in Focus: Jefferies Sticks With Hold Amid Growth Catalysts
Bloom Energy Corporation (NYSE:) is one of the On August 18, Jefferies analyst Lloyd Byrne reiterated a Hold rating on the stock with a $24.00 price target. The firm quoted several potential catalysts working in favor of the stock, including a letter from PJM Interconnection, the CEO's Bloomberg interview, and potential read-throughs from Crowdstrike earnings. It also estimated that investors may be expecting around 1GW of sales in 2027. The firm considers this target a possibility due to Bloom Energy's capacity expansion to 2GW by year-end 2026. 'We estimate the buyside could be baking in ~1GW of sales in '27. With BE expanding capacity to 2GW (1.3GW for product, rest for service) by YE26, hitting that target is possible. However, cadence and timing of deals matter, and we question whether investors are getting ahead of themselves. With BE +20% last week: expectations are ramping with DC deal & efforts by PJM to require new supply with new load. At current levels, we try to determine implied volumes. The stock is currently trading at ~22x '27E EBITDA of $526mn. The median multiple for data center / hyperscalers adjacent cos is ~18x (Ex – 2). To justify a more 'normalized' multiple, investors might be baking much higher EBITDA growth vs sell-side cons.' Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers. While we acknowledge the potential of BE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None.
Bloomberg
3 hours ago
- Bloomberg
Tech Sell-off Tied To AI Fatigue, Says Jefferies' Thill
Jefferies Software and Internet Research Tech Sector Leader Brent Thill discusses the tech-led selloff in an interview with Romain Bostick on 'The Close.' (Source: Bloomberg)
