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It seems that the artificial intelligence hype is not going away anytime soon, with companies just developing more and more new services, better hardware to carry it all and more ways in which they can take advantage of the craze and increase their revenues. Microsoft, which is currently considered the leader in the field, after investing in ChatGPT at the beginning, is reaching the stage where it will have to monetize.
"During the past few weeks, after many conversations with customers, partners and tests in the field, it became clear to us that the monetization opportunities that appeared as a result of the introduction of artificial intelligence into cloud services are expected to affect the entire industry." wrote Wedbush analyst Dan Ives, raising his price target for the stock to $375 from $340.
Credit Suisse analyst Sami Badri recently increased his price target for Microsoft's stock from $350 to $420 while maintaining a buy recommendation. Badri believes that Microsoft has an opportunity to generate revenue from artificial intelligence (AI) in a different manner by raising the prices of its Office software packages. This can be achieved by bundling them with the Copilot service, which aids users in writing documents faster and creating PowerPoint presentations.
Badri stated, "We believe that Microsoft's office products currently provide a significant increase in productivity, enabling the company to raise prices in line with the value customers receive. Additionally, Microsoft has the potential to introduce an ultra-premium capability that integrates ChatGPT."
Recently, reports surfaced regarding a collaboration between Microsoft and AMD. The two companies are jointly working on customized processors designed to efficiently handle the computational demands of running artificial intelligence (AI) models. This collaboration also aims to foster the development of chips specifically tailored for Microsoft's AI initiatives. By expanding its involvement in AI, Microsoft is strategically positioning itself to capitalize on the advancements in this field and establish its dominance in the market.
The impact of artificial intelligence on Microsoft's revenues is evident in its latest reports. Azure, the company's cloud computing platform, is projected to experience significant growth in the current quarter, with revenues expected to increase by approximately 26% to 27%. This growth is partially attributed to the utilization of AI services, contributing to about one percentage point of the overall revenue growth. These figures highlight the growing significance of AI and its positive influence on Microsoft's financial performance.
What is your overall sentiment towards Microsoft stock (MSFT)?
Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.