DA Davidson has reiterated its ‘Buy’ rating on Microsoft (NASDAQ: Image of MSFT) while maintaining its original price of $550.
The new features show a potential of over 40% from about stock the price today is $385.
The revised price of Microsoft stock comes as the company remains optimistic about the company artificial intelligence strategy, particularly Microsoft Copilot’s growth in adopting enterprise AI.
Analyst Gil Luria said Copilot is already working as a call center that directs questions and tasks to the most appropriate AI models.
The company sees this capability as a competitive advantage for Microsoft as businesses increasingly deploy multiple types of AI and assistants throughout their operations.
According to DA Davidson, many money initially saw Copilot as an example of AI, but the benefit of the platform is helping users manage workflows, best practices, access internal data, and choose the most appropriate AI tools for specific tasks.
The company also believes that Microsoft’s next opportunity is expanding its integration with open AI models.
Such a move could help enterprise customers reduce AI-related costs while increasing flexibility in how they deploy artificial intelligence within their organizations.
Luria also noted that competitors are also targeting the open AI market. Nvidia has shown increased interest in the integration of AI models, while Meta may expand its efforts in the space.
Despite the growing competition, the analyst remains bullish on Microsoft’s position within the AI business.
The company also expressed skepticism that China’s AI brands will take a bigger share of the US business market, citing political and business trends.
Wall Street remains bullish on MSFT’s stock
Microsoft’s latest analyst is very much in line with Wall Street’s opinion. According to consensus estimates from 36 analysts who research the stock over the past three months, as tracked by TipRanksMicrosoft has a ‘Strong Buy’.
The average 12-month forecast for Microsoft stock is $562.10, representing about 44% upside from current levels. Professional price targets range from $400 to over $680.
The bullish outlook also comes as Microsoft continues to expand its AI ecosystem. The art The company also reported more than 100 million monthly users of its Copilot offering, introduced new capabilities within Microsoft 365, and expanded partnerships to support AI adoption.
Recent developments include a major power purchase agreement with Chevron to help meet the demand for AI data center power and businesses in new AI sectors aimed at accelerating business deployments.
