Microsoft (MSFT) Stock Rises on Xbox Price Hike News
▼ Summary
– Microsoft stock rose on Monday following reports of potential Xbox console price increases due to component shortages.
– Tech leaker Moore’s Law is Dead claims Microsoft didn’t anticipate the AI boom’s impact on component availability, unlike Sony which planned ahead.
– The potential price hike could also lead to limited Xbox Series S|X production, marking the second recent price increase for Xbox devices.
– AMD plans GPU price increases due to the same RAM shortage, which could further impact Microsoft as AMD supplies Xbox processors.
– Wall Street analysts maintain a Strong Buy rating for Microsoft with a $631.98 average price target representing 33.36% upside potential.
Shares of Microsoft Corporation (MSFT) climbed higher on Monday as market participants reacted to speculation about a potential price increase for the company’s Xbox gaming consoles. The move comes amid ongoing supply chain pressures and component shortages, which have impacted several segments of the technology industry.
A recent report from the tech-focused source Moore’s Law is Dead suggests Microsoft did not adequately anticipate the surge in demand for components driven by the artificial intelligence sector. This oversight may have contributed to production constraints for Xbox hardware. The same source indicates that rival Sony appears to have secured its supply chain more effectively, with no immediate plans to raise prices for PlayStation consoles.
According to these leaks, Microsoft is expected to implement a price hike for Xbox consoles in the near term. This adjustment could coincide with reduced production volumes for the Xbox Series S and X models, potentially making the devices more difficult for consumers to find. If accurate, this would represent the second recent price increase for the Xbox lineup, following an earlier adjustment linked to rising tariffs from international trade tensions.
The broader technology sector is grappling with a shortage of memory components, and Microsoft is not alone in facing these challenges. Reports also suggest that Advanced Micro Devices (AMD) intends to raise prices for its graphics processing units due to similar supply constraints. This development could pose an additional complication for Microsoft, given that AMD supplies the custom processors used in Xbox consoles.
On Monday, Microsoft stock advanced 0.54%, continuing a year-to-date rally of 13.44%. Over the trailing twelve months, the company’s shares have gained 12.73%. Microsoft has been a notable beneficiary of growing interest in artificial intelligence, underscored by its strategic investments in OpenAI, the organization behind the popular ChatGPT platform.
Wall Street analysts maintain a largely optimistic view of Microsoft’s prospects. The current consensus rating is Strong Buy, derived from 33 Buy recommendations and two Hold ratings issued over the previous three months. The average price target for MSFT shares sits at $631.98, implying potential upside of roughly 33.36% from recent trading levels.
(Source: Tip Ranks)
