Microsoft is on the road to hitting a US$3 trillion (AU$4.5 trillion) valuation thanks to its leadership in the AI space, according to investment bank Morgan Stanley (lead image: Satya Nadella, Microsoft CEO).
Analysts at the bank, led by Keith Weiss, said that Microsoft’s stock price could surge by as much as 22 per cent as it solidifies its “pole position” in the race to dominate the AI market.
“Generative AI looks to significantly expand the scope of business processes able to be automated by software, and Microsoft stands best positioned in software to monetize that expansion, which accompanied with a still reasonable valuation makes Microsoft our Top Pick in large cap software,” Morgan Stanley’s Keith Weiss said in a note on Thursday.
Weiss even said that the burgeoning AI market was akin to a “gold rush” that included “picks and shovels” players and “gold miners.”
“Impressively, Microsoft has taken leading positions on both fronts, with Azure OpenAI Services representing a compelling platform for companies looking to build (the Picks and Shovels) and a broader portfolio of Generative AI-based application functionality in the market or in preview, like Github Copilot,” Weiss said.
Microsoft’s US$10 billion (AU$15 billion) investment in OpenAI, the firm behind ChatGPT, is also looking like an increasingly shrewd piece of business. Weiss said that it represents a potential $90 billion (AU$135 billion) incremental opportunity in 2025.
Weiss isn’t alone in his optimistic outlook for Microsoft. More than 50 Wall Street analysts rate the company as a buy or equivalent — though few are quite as bullish as Weiss. Microsoft’s stock is up by around 40 per cent for the year to date.
ChatGPT caused a stir in adland when it was released to the world, with copywriters fearing for their jobs and social media marketers delighting in the newfound potential to churn out copy. However, according to more recent data, it seems as though the dust is starting to settle with its website seeing a drop in desktop and mobile web traffic dropping 9.7 per cent.
