On Thursday, Microsoft Corporation (NASDAQ:MSFT) stock received downgraded status to neutral by analysts at Bank of America Corp (NYSE:BAC) Merrill Lynch, who had maintained buy rating on the MSFT stock since September 2008.
The analysts at Bank of America Corp (NYSE:BAC) Merrill Lynch said that this downgrade follows their deep buy thesis that had been predicated on an aggressive $40 billion share buyback program and the Windows 7 product cycle.
The BAC analysts wrote in a note to clients that they were hoping that MSFT would make a bold foray with Windows 8 into smartphones and tablets, conventional product cycle wisdom dictates that the stock should peak before a Windows launch, but they remained optimistic because the limited availability of touch-based devices weakened an objective assessment of Windows 8.
Now, six months post launch of Windows 8, despite more available touch-based devices, Windows 8 lacks momentum, challenging their optimism. Shares of Microsoft slipped 0.6% in premarket trade.
MSFT shares fell -0.56% to $28.41 after this news.