Shares of Microsoft rose about 1.12% to $539.67 on Thursday after five Wall Street firms raised price targets, while ServiceNow jumped 6.2% as investors rotated into enterprise software names during a broader AI-related selloff.
TD Cowen, Mizuho, Citi, UBS and Jefferies all lifted Microsoft targets. UBS set the highest target at $675 from $525, Jefferies at $650 from $575, Citi at $636 from $600, TD Cowen at $625 from $540, and Mizuho at $600 from $510. Analysts cited demand for Azure, Copilot adoption, Microsoft 365 strength and enterprise AI spending as supports. Microsoft is expected to report fiscal Q1 results after the close on October 28, with consensus estimates of $90.71 billion in revenue and EPS of $4.72.
ServiceNow's gain came after TD Cowen raised its price target to $165 from $140 and maintained a Buy rating. Analyst Derrick Wood expects strong Q3 results, driven by ITSM Prime upgrades, Armis security growth and US federal demand. Upgrades to Prime can raise average selling prices by about 30%, and the company's AI-related annual contract value has surpassed $1 billion. ServiceNow will also report results on October 28.
The rotation into enterprise software occurred as fresh US inflation data raised concerns about persistently elevated prices and borrowing costs. Producer prices rose 1.3% in September, more than double the 0.5% forecast, and annual PPI reached 6.3%, the largest increase since December 2022. The consumer price index also came in hot at 3.7% year-over-year. The VanEck Semiconductor ETF fell 2.11%, heading for its eighth straight losing session, while the iShares Expanded Tech-Software Sector ETF added about 1.05%.
While the reports focus on traditional equities, the stronger-than-expected inflation figures could keep borrowing costs elevated and influence risk appetite across markets, including digital assets, though no specific cryptocurrency is directly tied to the news.
