Microsoft may not be immune to a recession, but the company’s strong product offering makes it a well-insulated competitor even during difficult times, Raymond James said. “Microsoft’s long track record and breadth of product offering (often including discounts for multi-product commitments) make them a competitor for a broader range of enterprise software RFPs than any competitor,” wrote analyst Andrew Marok in a note to clients Thursday. “Its universal brand recognition makes the company a starting point for software discussions, with competitors often having to clear a high bar in terms of incremental capabilities to overcome the familiarity and comfort of the Microsoft brand name.” Marok resumed coverage of the technology giant with an outperform rating, noting that Microsoft retains a strong position in flourishing markets such as gaming and digital advertising. Years of experience and strong brand recognition also put the company in a better position to take share even in a downturn, he added. Marok cited recent data from Gartner suggesting that a strong number of chief investment officers plan to up IT spending going forward. “That combined with the need for increased efficiency in a downturn gives us increased confidence that Microsoft can weather potential storms,” he wrote. Shares of Microsoft have sold off sharply this year as markets grapple with rate hikes from the Federal Reserve and fears of an impending recession. The stock has plummeted more than 29% in 2022 but could rally another 26% based on the firm’s $300 price target. — CNBC’s Michael Bloom contributed reporting
