news/AMZN/2023.01.04/Microsoft shares lag Big Tech peers as growth worries prompt UBS downgrade.txt

After years of rapid growth in the cloud business that made Microsoft an investor darling, the Satya Nadella-led software giant is now battling lower spending by businesses reeling with rising borrowing costs.Microsoft's Azure cloud unit "is entering a steep growth deceleration that could prove to be worse in FY23/FY24 than investors are modeling," lead analyst Karl Keirstead warned, adding the market could be reaching saturation. UBS lowered the stock to "neutral" from "buy" and cut the price target by $50 to $250. That is lower than the median of $290 and the average "buy" rating from more than 50 analysts, according to Refinitiv data.Microsoft's stock hit a near two-month low of $226, making it the biggest loser on the benchmark S&P 500 index. It had lost 29% of its value in 2022, but outperformed Big Tech peers such as Alphabet Inc and Amazon.com Inc in a dismal year for the rate-sensitive sector.Declining spending on enterprise software from companies cutting costs and slashing jobs could also weigh on Microsoft's Office 365 business this year, Keirstead said. "We don't have as much confidence in the stock ... (at current valuation) to see much (if any) multiple expansion," he said.Shares of Amazon were also down 2% after UBS lowered the price target on the stock to $125 from $165 on concerns over slowing cloud growth. (Reporting by Yuvraj Malik in Bengaluru; Editing by Arun Koyyur)