Redmond, Washington-based Microsoft Corporation (MSFT) is one of the world’s largest and most diversified technology companies, with a market cap of $2.9 trillion. Its products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools and video games. 

Shares of this tech giant have lagged behind the broader market over the past 52 weeks. MSFT has gained 1.5% over this time frame, while the broader S&P 500 Index ($SPX) has surged 10.6%. Moreover, on a YTD basis, the stock is down 6.2% compared to SPX’s 5.3% decline. 

Narrowing the focus, Microsoft has underperformed the Technology Select Sector SPDR Fund’s (XLK) 7% rise over the past 52 weeks. However, it has outpaced XLK’s 9.7% downtick on a YTD basis.

Recently, on Apr. 30, Microsoft reported strong third-quarter earnings results. Its revenue rose 13.3% year-over-year to $70.1 billion, exceeding analyst expectations by 2.5%. The solid performance was driven by robust growth across all reportable segments, with the Intelligent Cloud segment leading the way, posting a 20.8% increase in revenue. Its operating income climbed 16% from the same quarter last year to $32 billion, contributing to a notable 17.7% year-over-year rise in its net income per share to $3.46. This EPS figure also surpassed Wall Street estimates by 8.1%.

For the current fiscal year, ending in June, analysts expect MSFT’s EPS to grow 10.4% year over year to $13.03. The company’s earnings surprise history is promising. It exceeded the consensus estimates in each of the last four quarters. 

Among the 45 analysts covering the stock, the consensus rating is a “Strong Buy” which is based on 37 “Strong Buy,” four “Moderate Buy,” and four “Hold” ratings. 

This configuration is slightly less bullish than a month ago, with 38 analysts suggesting a “Strong Buy” rating. 

On May 1, Piper Sandler Companies (PIPR) maintained an “Overweight” rating on MSFT and raised its price target to $475, which indicates a 20.2% potential upside from the current levels. 

The mean price target of $490.75 represents a notable 24.2% upside from Microsoft’s current price levels, while the Street-high price target of $600 suggests an ambitious upside potential of 51.8%.