Wedbush Analysts Hike Microsoft Stock Target
Wedbush analysts have recently increased Microsoft's (NASDAQ: MSFT) share price target from $340 to $375. This move comes in response to a resilient flow of cloud deals and an impending AI monetization opportunity.
Outperform Rating Reaffirmed Amid ChatGPT's Promising AI Monetization
Wedbush reaffirmed the Outperform rating for Microsoft's stock alongside the price increase, keeping it on their "Best Idea List." They strongly believed in Microsoft's progression from Azure/Office 365 to ChatGPT/AI monetization, adding substantial value to the company's sum-of-the-parts valuation.
AI Monetization: Faster than Anticipated
Wedbush analysts connected Nvidia's surprising guidance and the AI monetization opportunities opening up for Microsoft, implying a faster-than-expected realization. They believe that Microsoft's newfound AI potential is unfolding quicker than the market had originally anticipated.
AI Market Set to Bloom Over the Next Decade
Per the analysts' estimations, every $100 of Azure cloud expenditure corresponds to $35-40 of AI spending. They predict a colossal AI market opportunity worth $800 billion over the next ten years.
ChatGPT: A New Growth Pillar for Microsoft
Despite their bullish stance on Microsoft's non-AI segments, analysts predict that ChatGPT will form a vital growth element for Microsoft shortly.
Cloud and AI: The Dual Engines of Microsoft's Growth
Wedbush analysts believe that Microsoft's cloud and Office 365/Windows ecosystem will constitute an increasingly large share of the company's future growth. Despite current economic downturns, this combination is expected to spur growth and margins in FY23/FY24. Furthermore, the rising success of ChatGPT and AI will add another layer to Microsoft's growth narrative in the upcoming years.
Microsoft Shares Ascend in Pre-Market Trading
Following these analyses, Microsoft's shares are trending upward, recording a 1.1% increase in pre-market trading on Tuesday.