Wedbush Securities claims that the Federal Trade Commission's probe of Microsoft (MSFT, Financial) is "not a worry," given current FTC Chairwoman Lina Khan's expected departure following the transition to a Trump administration.
According to Wedbush analyst Dan Ives, the FTC's declaration of a broad investigation into Microsoft late Wednesday most certainly marks a "final shot" at Big Tech from Khan before she leaves. "For Microsoft, which has already been through its battle with the U.S. Government, we believe this FTC suit is much more bark than bite and will finally fade into the background once a new FTC chair is named by Trump in January," Ives said in a client note.
The probe apparently looks at things such as possible market share abuse, limited licensing terms affecting customer migration from Microsoft's Azure cloud platform, past cybersecurity events, and its association with OpenAI. Maintaining an Outperform rating on Microsoft with a $550 pricing target, Ives said a more tech-friendly FTC head might help to reduce criticism of Big Tech. He implied that the demise of Khan's presidency would cause a notable change in regulatory pressure.
