Microsoft Corporation (NASDAQ: $MSFT) is a multinational tech company that sells software, computer, gaming and mobile hardware, and cloud services. Based in Redmond, Washington, the company is best known for its Windows operating systems, Edge browser, and the Microsoft 365 productivity apps.
On Friday, Microsoft shares fell over 1% after a CISA report confirmed previous reports that a Russian hacking group had compromised communication between Federal officials and Microsoft.
CISA Confirmed Russian Hackers Accessed Microsoft Systems
On Thursday, April 11, the Cybersecurity and Infrastructure Security Agency issued an emergency directive to government agencies requesting them to address hacking concerns. The directive from CISA called on the affected agencies to conduct a complete impact analysis and identify the full extent of the compromised correspondence.
Details of the Attack
In January 2024, Microsoft revealed that it had detected “a nation-state attack” on its systems on January 12. According to the press release, the attack came from Midnight Blizzard or Nobelium, an actor tied to the Russian state.
In March 2024, the company gave an update on the attack, stating that Midnight Blizzard was “using information initially exfiltrated from our corporate email systems to gain, or attempt to gain unauthorized access.”
According to the update, one of the attack vectors used by the attacker was a password spay, where hackers use one password on various accounts to try and access them.
Mounting Pressure on Microsoft
At the start of this month, the Department of Homeland Security’s Cyber Safety Review Board released a scathing report that criticized Microsoft’s inability to stop cybersecurity attacks. It noted that a group tied to China had unhindered access to the inboxes of government officials and urged the tech giant to take remedial measures.
On Monday, April 8, Microsoft responded to the rising security challenges; it stated that it would begin using the Common Weakness Enumeration industry standard to publish root cause data for cyber-attacks. For years, the company had used its own standards to describe vulnerabilities in its system. The change is part of a security overhaul by the company dubbed Secure Future Initiative.
However, the changes were not enough to convince lawmakers. On April 8, US Senator Ron Wyden introduced a draft law to set minimum security standards for government agencies. According to the senator, the proposed legislation was necessitated by Microsoft’s “shambolic cybersecurity practices.”
Microsoft Expands A.I. Efforts
On Monday, April 15, Microsoft-backed OpenAI opened offices in Tokyo, Japan, as it seeks to expand its AI offerings in the country. The company already has offices in Dublin and London. Earlier in April, Open AI met with hundreds of Fortune 500 US and UK CEOs to pitch for business.
Microsoft-Backed Rubrik’s IPO Plans
On April 1, 2024, Rubrik, a cybersecurity firm backed by Microsoft, revealed its plans to go public. Further details reveal that the company plans to sell 23 million shares at $28-$31 per share. According to a Bloomberg report, that cited an unnamed source, the company aims to raise around $713 million during the IPO.
Following the successful Reddit IPO and the Astera Labs IPO, various companies have kicked off IPO plans, some of which have been on hold for nearly two years.
Microsoft Stock Performance
MSFT shares fell 1.41% on Friday, April 12, closing at $421.90 following the release of the CISA report. However, the shares were up 0.53% to $424.14 on Monday morning, following the IPO update on Rubrik and OpenAI’s Tokyo expansion plans.
Microsoft shares have had a great run in 2024, rising 14.38% year-to-date. Over the past 12 months, the stock is up 46.88%, outperforming the SPX, up 23.42% in the same period.
Analysts’ Outlook on Microsoft Stock
According to 35 Wall Street analysts, MSFT shares have an overall strong buy rating. The analysts forecast a broad range for the stock, with a high of $550 and a low of $440. Their average target for the stock is $474.08., which is a 12.06% upside based on the most recent price.
Should You Invest in MSFT Shares?
Analysts forecast that Microsoft will see a 15% jump in revenue at the end of this fiscal year compared to last year. They also forecast earnings will rise 19% to $11.66. Based on these forecasts and current performance thus far, it is no surprise that the company stock has had a general upward trend in recent months.
The acceleration of its AI effort is expected to have an incremental impact on its revenue, and it has already pushed its into the most valuable company by market cap. For instance, its cloud business has already seen a 6% boost in revenue thanks to AI. Factoring in the impact of AI, MSFT shares are expected to continue rising in the medium-term and long term.
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