11:25 AM EDT, 03/10/2025 (MT Newswires) -- Microsoft ( MSFT ) shares have weakened since its Q2 earnings report, partly due to "unexpected" slower growth in its Azure cloud computing platform, and the uncertainty about the cause and timeline for improvement is affecting investor confidence, UBS said in a note Sunday.

The analysts said the company has cited mid-2024 changes in its go-to-market, or GTM, strategy, but ambiguity about the root cause and the duration of the fix is affecting the stock. The analysts added that after speaking with several Microsoft ( MSFT ) partners, they found that changes to licensing, channel incentives, and account management in mid-2024 likely disrupted Azure sales, and it may take several quarters to resolve.

In addition to the GTM changes, other macro factors have also contributed to the slowdown, such as slower large-scale migration activity and some customers under-spending relative to their commitments. These broader issues are reflected in the results of Microsoft's ( MSFT ) competitors, such as Amazon's ( AMZN ) AWS and Alphabet's (GOOGL, GOOG) Google Cloud, the analysts said. They added that despite these challenges, if Azure can still achieve 31% total growth and 18% growth excluding AI, it suggests that the underlying growth drivers for Azure remain solid. However, with investor expectations for Q4 Azure growth set at 32-33%, the analysts believe these projections may be too high.

"Investor sentiment is decidedly mixed, based primarily on concerns about what exactly is weighing on core Azure growth and how long the fix might take," the analysts said, adding that they believe medium-term tailwinds "remain strong" on Azure but that investors "can afford to remain patient" in the near term.

UBS has a buy rating and a $510 price target on Microsoft ( MSFT ).

Price: 381.26, Change: -12.06, Percent Change: -3.07