In This Story
Microsoft is undoubtedly a frontrunner in the generative artificial intelligence race — and it could be the tech giant’s “iPhone Moment,” analysts said.
Dan Ives and other Wedbush analysts raised their price target on Microsoft from $500 to $550, and maintained an “outperform” rating in an analyst note on Sunday. The hiked target apparently reflects their research on Microsoft customers’ spending plans; “a tidal wave of Copilot and Azure monetization [is] now on the doorstep for MSFT,” the analysts wrote. “We have seen deal conversions for broader, enterprise-scale AI deployments ‘accelerating’ in the field as the AI Revolution takes hold.”
Wedbush added that it “strongly view[s] this as Microsoft’s ‘iPhone Moment’ with AI set to change the cloud growth trajectory in Redmond.”
Citing research on Microsoft’s customers and partners, “it has become crystal clear to us that the monetization opportunities around deploying AI and ChatGPT in the cloud is a transformational opportunity across the industry,” with Microsoft “in the drivers seat,” the analysts wrote.
Compared to its cloud rivals, Amazon and Google, Wedbush said Microsoft has “a strong competitive cloud edge” coming, and analysts estimate Copilot deployments could add around $25 billion to Microsoft’s trajectory by fiscal year 2025.
While the use of AI continues to grow in Microsoft’s fiscal 2024, Wedbush wrote that 2025 “remains the true inflection year of AI growth” for the firm.
Microsoft recently lost its top spot as the world’s most-valuable company to Apple, after the iPhone-maker unveiled its AI plan, Apple Intelligence, during its Worldwide Developers Conference. Earlier this month, the Department of Justice and the Federal Trade Commission announced a deal to carry out antitrust investigations of Microsoft, OpenAI, and Nvidia. Microsoft and its partner OpenAI will be investigated by the FTC for potentially anticompetitive behavior in the AI industry.
The tech giant’s share price was up 0.2% during Monday morning trading, and is up 19.5% this year.