Microsoft stock notched an all-time high on Monday after a Wall Street analyst said the company is seeing a healthy uptake of its artificial intelligence offerings.
Wedbush Securities analyst Daniel Ives said he is incrementally more bullish on Microsoft stock after customer checks showed strong uptake of Microsoft's Copilot AI services.
"We have seen deal conversions for broader enterprise-scale AI deployments 'accelerating' in the field," Ives said in a client note.
Microsoft is "on the doorstep" of a "tidal wave" of Copilot and Azure cloud-computing monetization, Ives said.
Microsoft Stock Gets Price-Target Hike
Ives reiterated his outperform rating on Microsoft stock and raised his price target to 550 from 500. Microsoft also is on Wedbush's "Best Ideas List."
On the stock market today, Microsoft stock rose 1.3% to close at 448.37. Earlier in the session, it reached a record high of 450.93.
"Based on our recent work in the field, we believe (in) the next three years over 70% of (the Microsoft) installed base will ultimately be on this AI functionality," Ives said. "While AI use cases are building markedly in fiscal 2024, it's clear fiscal 2025 for Microsoft remains the true inflection year of AI growth."
Microsoft has a strong competitive edge against rivals in the AI and cloud-computing business, he said. Those rivals include Amazon and Alphabet unit Google.
AI Party Just Getting Started
"Right now it's 9 p.m. in this AI party that we see lasting till 4 a.m. as enterprise/consumer AI use cases just start to take hold," Ives said.
Wedbush says other companies that will benefit from the "AI revolution" include Apple and Nvidia.
Last Thursday, Jefferies analyst Brent Thill maintained his buy rating on Microsoft stock with a price target of 550. He called Microsoft his "top AI pick."
Microsoft stock is on the IBD Long-Term Leaders list.
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