Oppenheimer (OPY) Surprisingly Downgraded Microsoft (MSFT) to Perform from Outperform

Microsoft's (MSFT) broad product portfolio includes various business segments. The company has been known to generate most of its revenue from the sales of operating systems and application development tools, which account for nearly 50% of its net sales. This segment includes popular products such as Windows, Azure, SQL Server, and Visual Studio. In addition, Microsoft's cloud-based software applications, including Microsoft 365, Dynamics 365, OneDrive, and products such as Skype and Microsoft Teams, contribute about 25% of its net revenue.

However, Oppenheimer's recent downgrade may indicate that the famous investment boutique’s analysts are no longer as optimistic about Microsoft's growth prospects. This is due to a variety of factors, such as increased competition, changing market conditions and concerns about the company's financial performance, as well as the lack of new promising contracts with the U.S. Department of Defense, and Skype's too-long road to monetization.