Dan Ives, a renowned strategist at the US investment bank Wedbush, and his team have stated that the launch of the artificial intelligence (AI) tool CoPilot represents Microsoft's "iPhone moment" and will change the company's growth trajectory.
In its latest report, the bank stated that its latest survey of artificial intelligence customers showed that Microsoft's generative AI feature Copilot, launched earlier this year, has achieved "disruptive" results in monetization. In view of this, Wedbush has raised its target stock price from $425 to $450 and maintains a "outperform" rating.
Ives said, "We believe this is Microsoft's' iPhone moment ', and artificial intelligence will change its cloud computing growth trajectory in the coming years. In short, based on our recent work in this field, we believe that over 60% of Microsoft users will eventually apply this AI feature to the enterprise/business sector in the next three years."
Wedbush expects to see a "real" turning point in AI growth by 2025, with pricing, testing customers, and use cases gradually rolling out over the next three to six months.
It is reported that the growing profit potential of Microsoft's artificial intelligence tools has prompted Ives to raise Microsoft's target stock price from $425 to $450, which means that Microsoft's stock price may rise by about 20% from its current level.
Ives said, "We believe that Microsoft's stock price has not yet reflected the next wave of growth in cloud computing and artificial intelligence. Microsoft has a strong competitive advantage in cloud computing compared to Amazon and Google." He added that Microsoft's total revenue may increase by $25 billion next year.
"We estimate that in the past few years, for every $100 spent by Microsoft on Cloud Azure, Microsoft CEO Satya Nadella and the company's spending on artificial intelligence will increase by $35 to $40.".
Ives stated that Microsoft refers to CoPilot as "your daily artificial intelligence companion" and as customers seek to increase productivity, it will have more and more use cases in Microsoft's product line, including Windows, Power Pages, Dynamics 365, and Office.
He predicts that Microsoft, along with other technology industries, will fully embrace artificial intelligence and trigger a "$1 trillion wave of artificial intelligence gold spending" in the next decade, comparable to the internet boom of the 1990s. This should ultimately be good news for Microsoft investors.