The Tech Industry Is Huge—and Europe’s Share of It Is Very Small
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 20 2025
0mins
Should l Buy MSFT?
Source: WSJ
Europe's Technology Gap: Europe is struggling to develop its own major technology companies, leaving it reliant on giants like Google, Amazon, and Meta, which contributes to economic stagnation.
Economic Challenges: The continent faces additional pressures from potential higher tariffs that could further hinder growth and exacerbate its technological shortcomings.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 401.140
Low
500.00
Averages
631.36
High
678.00
Current: 401.140
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Overall Performance: Microsoft's total revenue increased by 17% year-over-year to $81.3 billion, with its Productivity and Business Processes division growing by 16% and consumer cloud revenue rising by 29%, demonstrating excellent performance across its customer base and the positive impact of AI feature integration on business growth.
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- Attractive Valuation for Investment: Microsoft's current operating price-to-earnings ratio is near its lowest levels since 2020, and despite trading at a premium in the past, this valuation correction presents a compelling buying opportunity for investors, with significant upside potential expected over the next few years.
See More
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- Product Update Plans: Altman also mentioned that OpenAI plans to release an updated chat model this week, and its AI coding tool Codex has grown by about 50% in the past week, which will further enhance its product competitiveness.
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See More
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- Impressive Financial Results: In Q4, Broadcom generated record revenue of $18 billion, up 28% year-over-year, with adjusted EPS of $1.95, a 37% increase, indicating robust overall business performance despite a 65% rise in AI-related revenue.
- Optimistic Growth Forecast: Management projects Q1 fiscal 2026 revenue of $19.1 billion, nearly a 29% increase, with adjusted EBITDA expected at $12.8 billion, up 30%, showcasing the company's potential for sustained growth in the future.
- Industry Leadership: Broadcom is widely recognized as a leader in Application-Specific Integrated Circuits (ASICs), and its diverse product offerings ensure it is not solely reliant on AI chip sales, positioning it to capitalize on ongoing investments in data centers and expand market opportunities.
See More
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- Alphabet's Capacity Warning: Despite Alphabet's warning of potential 'excess capacity' in data centers in its financial report, the company plans to raise $20 billion through a bond sale, demonstrating its robust capital-raising capabilities in the market.
- ChatGPT Growth Resurgence: ChatGPT's monthly growth rate has exceeded 10% again, suggesting that if the broader industry can sustain such growth, Alphabet is unlikely to face 'excess capacity' issues, thereby enhancing its competitive position in the market.
See More
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- Chip Supply Chain Challenge: Taiwan's Vice Premier Cheng Li-chiun stated that shifting 40% of the chip supply chain to the U.S. is nearly impossible, countering U.S. Commerce Secretary's earlier claims, indicating potential escalation in tensions between the two nations over semiconductor issues.
- Strained Sino-British Relations: China expressed strong discontent over the U.K.'s expansion of the visa scheme for Hong Kong residents, labeling it as 'despicable', following the sentencing of pro-democracy media tycoon Jimmy Lai to 20 years in prison, which could further deteriorate Sino-British relations.
- U.S. Maritime Warning: The U.S. Maritime Administration issued a notice urging ships to stay as far away as possible from Iranian waters due to recent boarding attempts, which could impact international shipping safety and exacerbate geopolitical tensions in the region.
- Market Dynamics Review: Despite the S&P 500 rising by 0.47% and Asian markets generally advancing, major tech firms are still grappling with capital expenditure and financing concerns, with Alphabet warning of potential 'excess capacity' in data centers, which may influence its future investment strategies.
See More
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- Massive Market Potential: With a current market cap of $1.6 trillion, Broadcom could offer investors an 86% return if it joins the $3 trillion club, highlighting its strong growth potential in the data center sector.
- Impressive Financial Performance: In Q4, Broadcom generated record revenue of $18 billion, a 28% year-over-year increase, with adjusted EPS reaching $1.95, up 37%, indicating robust performance beyond just AI-related sales.
- Strong Growth Forecast: Management projects Q1 fiscal 2026 revenue of $19.1 billion, nearly a 29% increase, with adjusted EBITDA expected to rise 30% to $12.8 billion, showcasing the company's growth momentum.
- Industry Leadership: As a leader in Application-Specific Integrated Circuits (ASICs), Broadcom is well-positioned to benefit from the ongoing data center infrastructure demand, with global capital expenditures projected to approach $7 trillion by 2030.
See More
