The pricing of Microsoft’s (MSFT) new AI-related product that will be integrated into Microsoft Office has surprised Wall Street analysts with positive results.
UBS analyst Karl Keilstedt said the $30 monthly price tag for the M365 Copilot product was “very high for what you would expect.”
“This significantly raises our provisional office forecast for 2025.” [revenue] Rise is currently estimated to be between $7-9 [billion]UBS previously estimated revenue at $3 billion to $5 billion. ”
Copilot, the most expensive version of Microsoft’s AI-powered chatbot, can summarize a user’s unread emails, reformatted PowerPoint bullet points, and send summaries on demand, to name a few. It is said that you can create drafts. The company offers additional AI services such as chatbot integration via Bing and Bing Chat Enterprise. Bing Chat Enterprise is free for Microsoft 365 subscribers and $5 for out-of-network subscribers.
After Tuesday’s announcement, several analysts joined Kiested in boosting expectations, sending the stock soaring about 4% to a record closing price.
“While M365 Copilot is still only a limited preview and has not yet incorporated monetization into its model, it is clear that M365 Copilot and future AI price increases will be phased. [revenue]Brent Till, an equity analyst at Jefferies, wrote in a note on Tuesday.
The AI hype played a big role in Microsoft’s stock gaining nearly 50% this year. In January, the tech giant announced a $10 billion investment in OpenAI, the parent company of popular AI chatbot ChatGPT. In February, Microsoft teased “the new Microsoft Bing powered by AI.” By May, Bing was his ChatGPT’s default search engine, as Microsoft officially took his AI warfare into territory previously owned by Alphabet (GOOGL) during its Q1 earnings. rice field.
“As customers continue to choose our ubiquitous computing fabric from the cloud to the edge, especially every application is powered by AI,” Satya Nadella, Microsoft’s chairman and CEO, said at an earnings call in April. As we used it, Azure gained a share.” “We have the most powerful AI infrastructure and our partner he is using not only OpenAI but also big AI start-ups like Nvidia and Adept and Inflection to train models at scale. .”
Investors put aside previous concerns about slowing cloud growth and bought into the AI hype. Bank of America Research analyst Brad Sills raised Microsoft’s price target from $340 to $405 in a note on Wednesday, and AI could boost full-year 2024 sales. emphasized.
“We repeat our buy assessment and see Microsoft as the frontrunner … given Microsoft’s view of AI’s leading role in software,” Sills wrote.
Josh Schafer is a reporter at Yahoo Finance.
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