Microsoft (MSFT) stock is down slightly in Thursday's session after a leaked internal memo revealed the tech giant's decision to eliminate approximately 650 roles at its Xbox gaming division.
"As part of aligning our post-acquisition team structure and managing our business, we have made the decision to eliminate approximately 650 roles across Microsoft Gaming – mostly corporate and supporting functions – to organize our business for long term success," said Microsoft Gaming CEO Phil Spencer in a memo obtained by CNBC. "With these changes, our corporate and supporting teams and resources are aligned for sustainable future growth, and can better support our studio teams and business units with programs and resources that can scale to meet their needs."
Spencer added that there will be no games, devices or experiences canceled and no studios closed as result of these job cuts.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This is the third round of layoffs in the Xbox gaming division since Microsoft closed its $69 billion acquisition of Activision Blizzard in October 2023.
Is Microsoft stock a buy, sell or hold?
Microsoft is up roughly 26% on a total return basis (price change plus dividends) over the past 12 months and Wall Street thinks the Dow Jones stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for MSFT stock is $502.43, representing implied upside of roughly 20% to current levels. Additionally, the consensus recommendation is Strong Buy.
Financial services firm Argus Research is one of the more bullish outfits on the blue chip stock with a Buy rating and $526 price target.
"Microsoft continues to pursue long-term growth through its artificial intelligence (AI) and cloud investments, and may just hold the premier position in business technology," said Argus Research analyst Joseph Bonner in a July 31 note. "The company is one of just a few with a complete, integrated product set aimed at enterprise efficiency, cloud transformation, collaboration, and business intelligence. It also has a large and loyal customer base, a large cash cushion, and a rock-solid balance sheet."
Argus Research's $526 price target represents implied upside of nearly 25% to current levels.
Related Content
- If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
- Earnings Calendar and Analysis for This Week
- Analysts' Top S&P 500 Stocks to Buy Now
-
The $33,000 Retirement: One Man's Surprising Path to Financial Freedom at 61Forget what society tells you, even with less than $1 million, you can be happy in retirement.
-
The Best Aerospace and Defense ETFs to BuyThe best aerospace and defense ETFs can help investors capitalize on higher government defense spending or hedge against the potential of a large-scale conflict.
-
The Best Aerospace and Defense ETFs to Buy
The best aerospace and defense ETFs can help investors capitalize on higher government defense spending or hedge against the potential of a large-scale conflict.
-
Roth IRA Conversions in the Summer? Why Now May Be the Sweet SpotConverting now would enable you to spread a possible tax hit over more than one payment while reducing future taxes.
-
A Financial Expert's Three Steps to Becoming Debt-Free (Even in This Economy)If debt has you spiraling, now is the time to take a few common-sense steps to help knock it down and get it under control.
-
I'm an Insurance Expert: This Is How Your Insurance Protects You While You're on VacationHere are three key things to consider about your insurance (auto, property and health) when traveling within the U.S., including coverage for rental cars, personal belongings and medical emergencies.
-
Stock Market Today: It's 'Most Sectors Go' Ahead of Independence DayThe resilience trade continues to work, even for sectors and stocks with specific uncertainties.
-
June Jobs Report Dashes July Rate Cut Hopes: What the Experts Are SayingThe June jobs report shows that hiring remains strong and gives the Fed a little extra breathing room when it comes to interest rates.
-
Investing Professionals Agree: Discipline Beats Drama Right NowBig portfolio adjustments can do more harm than good. Financial experts suggest making thoughtful, strategic moves that fit your long-term goals.
-
'Doing Something' Because of Volatility Can Hurt You: Portfolio Manager Recommends Doing This InsteadYes, it's hard, but if you tune out the siren song of high-flying sectors, resist acting on impulse and focus on your goals, you and your portfolio could be much better off.
