Jefferies: Copilot welcomes a major upgrade, reiterates Microsoft "Buy" rating
Jefferies analyst Brent Thill reiterated a "Buy" rating on Microsoft with a target price of $550, emphasizing Microsoft's active expansion in the field of artificial intelligence, particularly the upgrades to Copilot. Despite facing challenges in data access and governance, Microsoft's financial condition remains robust, with strong revenue growth and an overall market sentiment that is cautiously optimistic. Thill noted that the adoption of Copilot is still in its early stages, but the intent to launch is strong, and it is expected to enhance its capabilities
According to Zhitong Finance APP, on May 23, Jefferies analyst Brent Thill reiterated a "Buy" rating on Microsoft with a target price of $550. Thill discussed the key highlights of Microsoft's recent AI-centric activities. The company plans to enhance its AI assistant Copilot by integrating reasoning capabilities through an increase in researcher and analyst agents. Although its adoption is still in the early stages, the company plans to expand the use of Copilot.
Microsoft offers AI-based cloud, productivity, and business solutions, focusing on efficiency, security, and advancements in AI. Overall, Microsoft ranks second among the AI stocks that Jefferies is focusing on.
In further discussions, the firm also pointed out that Microsoft has a robust financial position—its revenue is growing at a good pace, and its profitability metrics are strong. These factors support Microsoft's aggressive AI expansion strategy. However, there is a challenge that may limit the broader integration of Copilot, which is the demand for improved data access and governance. Nevertheless, overall market sentiment remains cautiously optimistic.
The company is also striving to position itself as a central hub for AI by promoting an open platform. The CEO of Microsoft also stated that the updates to Copilot since the launch of Teams are the most significant, marking a major leap in AI. Additionally, added features are expected to enrich the tool's capabilities, such as Copilot Search and Copilot Memory. In summary, investors are very focused on Microsoft's stock performance and efforts in the AI field, and the company is generally optimistic about its development direction and overall growth potential.
Thill stated: "We attended the Microsoft Build conference in Seattle and gathered five key points: Copilot will gain reasoning capabilities through researcher and analyst agents and will be launched in the coming months; the adoption of Copilot is still in the early stages, but the intent to launch is strong; data access and management are considered the biggest obstacles for Copilot; macro market sentiment remains cautiously optimistic, and Microsoft is viewed as a safe haven; Microsoft is leaning towards an open platform to become the center of AI."
