Investing.com – The “AI party” for tech stocks is “just getting started” and should lead to a wave of consumer spending on Microsoft (NASDAQ:) products optimized for artificial intelligence, according to analysts at Wedbush.
In a note to clients Sunday raising their price target on Redmond, Wash.-based Microsoft shares from $500 to $550, Wedbush analysts said “recent client checks in the artificial intelligence space” indicate monetization of Microsoft’s AI-powered Copilot tool and its Azure cloud computing service is “on the doorstep.”
“We are seeing an ‘acceleration’ in the number of deals to implement artificial intelligence at a broader enterprise scale in the field,” analysts say.
They maintained their “outperform” rating on Microsoft shares, adding that artificial intelligence is poised to “change the cloud growth trajectory” of the company, with more than 70% of its current customer base eventually using its automated capabilities. The number of consumers using Microsoft’s artificial intelligence offerings is also expected to reach an “inflection point” of rapid growth in fiscal 2025.
“[T]Its stock has not yet been priced into what we believe is the next wave of growth in cloud and artificial intelligence,” Wedbush analysts said.
Shares of Microsoft, which has benefited from investment from ChatGPT maker OpenAI, are up more than 19% this year, giving the company a market capitalization of about $3.29 trillion. In a separate note, Wedbush analysts said the company is now in a race with AI chip maker Nvidia (NASDAQ:) and iPhone maker Apple (NASDAQ:) to reach a $4 trillion valuation.