Microsoft Corporation (NASDAQ: MSFT) is one of the biggest companies and one of the greatest growth stories is corporate history. That does not mean that its stock always goes up. Now one of the top bulls is dialing down expectations for Microsoft investors.

Stifel’s Brad Reback has been one of the more bullish Microsoft analysts on Wall Street. Now the firm has decided to dial down some of its great expectations by cutting the price target to $475 from $515. While it maintained its Buy rating, this new price target adjustment is now under the consensus price target of $507.

Microsoft’s stock was last seen down 8% so far in 2025 and it is down 17% from its all-time high. It has even seen its shares drift under the $3 trillion mark again.

Tactical Bulls has noticed in recent weeks, even before the stock market sell-off was in full force, that analysts were maintaining Buy and Outperform ratings on popular stocks while slashing aggressive upside price targets.

There is one phrase that bullish investors rarely like to see in a research report — range-bound!

The move is after spending time with Microsoft’s investor relations team. Several issues were noted as to why Microsoft may now be a rangebound stock. Investor sentiment is weak and is highly focused on capital spending.

Friday’s report shows that investors are also waiting to see if Azure and Commercial Cloud growth can sustainably grow more than Microsoft’s capital spending in its genAI capex plans. Reback continues to believe that genAI will help contribute toward sustainable double-digit revenue growth (and earnings growth) for years to come, but this is the key driver — (its) ability to convert its substantial capex investments into accelerating revenue growth.

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Unfortunately, those lofty capital spending plans (about $87 billion or so for this year) are expected to weigh on earnings. Reback expects that 2026 growth will slow.

The report also noted that it took about 4 years in the original Azure build-out before Microsoft’s commercial cloud revenue was growing twice as fast as its capital spending — the stock is likely range-bound until the market gains comfort that Azure/Commercial Cloud growth can sustainably run ahead of capex increases.

Microsoft was last seen down 2.6% at $386.55 on Friday. Its 52-week range is $381.00 to $468.35 and its market cap is now about $2.88 billion.