It has been a triumphant 12 months for the technology sector, with Microsoft (NASDAQ: MSFT) once again being at the center of attention.
Amidst the ongoing artificial intelligence (AI) boom, MSFT has not only played a pivotal role but has also commanded substantial investor attention throughout 2023. As one of the seven Big Tech giants propelling the S&P 500‘s impressive gains, Microsoft’s stellar performance has brought the broader index to the cusp of its all-time high.
Fueled by robust fundamentals and strategic acumen, Microsoft has solidified its position as one of Wall Street analysts’ darling stocks. In this regard, a renowned analyst raised the stock’s price target to $450 this week, heralding the tech giant’s own “iPhone moment.”
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Microsoft has “strong competitive cloud edge” over competitors
Wedbush’s veteran tech analyst Dan Ives raised the price target on Microsoft’s stock to $450 on December 28, citing a “game-changing monetization” opportunity for the company in 2024.
The price target, which suggests an upside of more than 20% from MSFT’s current price, comes amid Wedbush’s bullish views for its recently launched Copilot chatbot and other AI offerings. In this light, Ives likened the Windows maker’s AI prospects to Apple’s launch of its first iPhone in 2007.
“We view this as Microsoft’s “iPhone Moment” with AI set to change the cloud growth trajectory.”
– Ives added.
Despite double-digit gains in 2023, Microsoft’s stock is yet to price in the new wave of cloud and AI expansion due to its “strong competitive cloud edge” compared to peers like Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL), Ives added.
The expert was particularly bullish on Microsoft’s AI companion, Copilot, saying it could generate $25 billion in revenue for the company by fiscal 2025.
“In a nutshell based on our recent work in the field we believe over the next three years over 60% of its MSFT installed base will ultimately be on this AI functionality for the enterprise/ commercial which changes the landscape.”
Microsoft’s shares were trading at $374.07, down 0.16% on the day. Year-to-date, the stock is up over 56%, outperforming the broader S&P 500 index.
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