Investing.com reports: Wedbush Raises Microsoft Price Target to $500, Maintains Outperform Rating on AI Growth Outlook.

Investing.com reports: Wedbush Raises Microsoft Price Target to 0, Maintains Outperform Rating on AI Growth Outlook.


Investing.com– Wedbush raised its price target for Microsoft Corporation (NASDAQ:) on Monday and maintained its outperformance on the tech titan, citing increased optimism about the company’s artificial intelligence offerings.

Wedbush raised Microsoft’s PT from $475 to $500, while maintaining its outperform rating.

Wedbush analysts said they are “increasingly optimistic” about Microsoft’s monetization of its AI-based Copilot product, and that the brokerage has seen an acceleration in AI adoption among Microsoft customers and industry leaders.

Copilot was an AI-based chatbot launched by Microsoft in 2023 and was eventually integrated as an assistant into the Windows operating system, as well as Microsoft’s entire suite of enterprise software products.

“We view this as Microsoft’s ‘iPhone Moment’ with AI poised to change Redmond’s cloud growth trajectory over the next few years and our recent checks provide further confidence in this dynamic,” wrote the analysts at Wedbush in a note Monday.

Wedbush predicts that more than 70% of Microsoft’s installed base will adopt its AI capabilities over the next three years. The brokerage also expects AI offerings to add “another $25-$30 billion to Microsoft’s revenue by 2025.”

Microsoft has leaned heavily on the AI ​​boom over the past year, leveraging its investment and partnership with ChatGPT creatpr OpenAI to integrate AI into its suite of products. It paid off for the Redmond-based giant, which beat profit estimates for all four quarters of 2023.

The AI ​​boom has also seen Microsoft overtake Apple Inc (NASDAQ:) to become Wall Street’s most valuable listed company. Microsoft stock is up about 14% so far in 2024, outperforming a 10% rise in the index.

Wedbush nevertheless flagged some risks for Microsoft. The brokerage said increasing competition, pricing, technological changes and macroeconomic headwinds could prevent it from achieving its price target and rating.

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