Microsoft (NASDAQ:MSFT) stock is falling slightly in early trading after the IRS determined that the company must pay “at least $28.9 billion” in back taxes. MSFT announced that it would contest the decision.
The Details of the Tax Dispute
According to the software maker, the IRS is claiming that the company owes the money because it had incorrectly moved its profits to low-tax areas such as Puerto Rico. But MSFT wrote that it had altered its financial practices in past years, making Washington’s claim inaccurate. Additionally, the firm contends that the IRS underestimated the tax relief to which it was entitled under former President Donald Trump’s tax cuts.
Microsoft reported that it would appeal the agency’s decision to IRS Appeals, which MSFT described as “a separate division of the IRS charged with resolving tax disputes.”
Morgan Stanley Is Bullish on MSFT Stock
On Oct. 10, Morgan Stanley reported that MSFT stock remains its top pick among software companies. After conducting a survey of companies’ Chief Information Officers, the bank believes that MSFT is the leader in the AI race and will continue to gain market share in the category.
Morgan Stanley also predicts that Microsoft’s cloud unit, Azure, will benefit from stronger demand for cloud infrastructure going forward.
The bank kept a $415 price target and an “overweight” rating on the shares.
Mixed Metrics From Investor’s Business Daily
For its part, Investor’s Business Daily has a Composite Rating of 97 on MSFT, while it reports that the shares’ Relative Strength rating is 92, indicating that the shares have far outperformed the stock market in the last year.
However, the website gives the name an Accumulation/Distribution rating of just C-, suggesting that institutions have not been buying many net shares of MSFT stock in the last 13 weeks.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
