TLDR
- Microsoft stock has fallen 8% this year, underperforming the S&P 500
- Wedbush analyst Dan Ives maintains Outperform rating with $550 price target (42% upside)
- Microsoft will launch its first cloud region in Malaysia by Q2 2025
- The Malaysia cloud region will feature three data centers and comply with local data regulations
- Microsoft projects $10.9 billion in new revenues and creation of 37,575 jobs in Malaysia from 2025-2028
Microsoft shares have taken a significant hit in 2025, dropping 8% since the beginning of the year. This decline outpaces the broader market, with the S&P 500 down only 3.5% during the same period.
The tech giant’s stock has been caught in a broader tech selloff. Investors are rotating away from riskier assets amid concerns about President Donald Trump’s tariffs potentially weighing on growth and fueling inflation.
Despite this recent performance, some Wall Street analysts remain highly optimistic about Microsoft’s prospects. Wedbush analyst Dan Ives is among the most bullish.
Ives maintains an Outperform rating on Microsoft shares. His price target of $550 suggests a potential upside of 42% from current levels.
In a research note published Wednesday, Ives described Microsoft as a “table pounder name to own at current valuations.” A table pounder refers to a stock in which an analyst has strong conviction.
The analyst believes Microsoft’s growth story remains intact. He points to the company’s Azure cloud-computing platform as a particular strength.
Ives also expects artificial intelligence revenue to continue beating Wall Street’s expectations. He views Microsoft as “one of the best ways to play the AI revolution theme over the coming years.”
The majority of analysts rate Microsoft as a Buy
The sentiment is widely shared across Wall Street. According to FactSet data, 54 out of 57 analysts covering Microsoft rate it as a Buy.
The consensus price target sits just under $505, indicating analysts generally see upside potential from current levels. This strong analyst backing comes despite the recent stock weakness.
Meanwhile, Microsoft continues to expand its global infrastructure. The company has announced plans to establish its first cloud region in Malaysia.
The new cloud region will be located in Greater Kuala Lumpur. Microsoft expects it to be operational by the second quarter of 2025.
This Malaysian facility will feature three data centers. It represents a milestone in Microsoft’s 33-year presence in the country.
According to a company-commissioned report, Microsoft projects this investment will generate $10.9 billion in new revenues between 2025 and 2028. This includes revenue for Microsoft, its partners, and cloud-using customers.
The investment is also expected to drive local economic growth. Microsoft anticipates the creation of 37,575 new jobs, including 5,700 in the IT sector.
The cloud region will provide Malaysian organizations with access to Microsoft’s cloud technologies. This access should help these organizations scale operations, increase efficiency, and enhance digital resilience.
Microsoft Malaysia managing director Laurence Si highlighted the importance of this development. He described it as “key to powering the nation’s growing AI economy.”
The new facility will comply with local data residency requirements. This ensures organizations can manage their data in accordance with government regulations.
This investment follows earlier commitments by Microsoft in Malaysia. In May 2024, CEO Satya Nadella unveiled a $2.2 billion investment to advance Malaysia’s cloud and AI capabilities.
By December 2024, Microsoft had launched the “AI for Malaysia’s Future” initiative. This program aims to develop AI skills for 800,000 Malaysians by the end of 2025.
The Malaysia expansion comes as other tech giants also invest in the region. In May 2024, Google committed $2 billion to establish its first data center and Google Cloud region in Malaysia.
Despite the current stock pressure, Microsoft continues to execute on its global expansion plans. The company appears focused on long-term growth opportunities, particularly in cloud computing and artificial intelligence.
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