Wedbush: Microsoft AI enterprise applications accelerate landing, raising target price to $600
Wedbush Securities analysts raised Microsoft's target price from $515 to $600, maintaining an "outperform" rating. Research shows that AI applications in the enterprise sector are accelerating, with over 70% of enterprise users expected to deploy AI features in the next three years, potentially bringing Microsoft an additional $25 billion in revenue. Analysts point out that the combination of cloud services and AI will drive Microsoft's future growth and profit margin improvement
According to the Zhitong Finance APP, Wedbush Securities pointed out that recent research on Microsoft's (MSFT.US) artificial intelligence products and services shows that the adoption rate in the enterprise sector has accelerated. Analysts raised Microsoft's target price from $515 to $600, maintaining an "outperform" rating, and continued to include the company led by Satya Nadella in their list of top investment picks.
In a report to clients, the analysts mentioned: "As the AI revolution deepens, we observe that the transaction conversion rate for enterprise-level AI large-scale deployment is 'accelerating.' Many Microsoft customers are currently focusing on implementing enterprise-level application scenarios in verticals such as finance, government, and retail, which are performing particularly well."
Further analysis indicates that over 70% of Microsoft's enterprise and commercial market installed users will deploy such AI capabilities in the next three years, which is expected to change the company's growth trajectory. The analysts explained: "Our recent research on partners shows that Microsoft customers' feedback on Copilot deployment continues to be positive, and this could add approximately $25 billion in revenue for Microsoft by fiscal year 2026."
The report also mentioned: "It is estimated that in the past few years, for every $100 spent by customers on Azure cloud services, an additional $50 in AI investment will be generated in the future (originally estimated at $40). Our core view is that cloud services and AI monetization will occupy an increasingly larger share of Microsoft's business and drive growth and profit margin improvements in the coming years."
