Shares of the technology giant Microsoft (NASDAQ:MSFT) have gained about 58% year-to-date. Despite this notable appreciation in its stock, Wedbush analyst Daniel Ives believes that MSFT has more room to run due to its Artificial Intelligence (AI) initiatives. The five-star analyst reiterated a Buy on Microsoft stock on December 28 and increased the price target to $450 from $425, implying 19.91% upside potential from current levels.
The analyst expects MSFT’s AI initiatives to accelerate its growth, with its Copilot offering likely to add multi-billion dollars to its top line. The company introduced Copilot, its generative AI tool for work, in March 2023.
During the Q1 conference call, the company said it has one million paid Copilot users. Moreover, over 37,000 organizations have subscribed to Copilot for business, up 40% sequentially, with significant traction outside the U.S.
It’s worth highlighting that Microsoft stock is on Wedbush’s best idea list for 2024. Further, Michael Turrin of Wells Fargo termed MSFT his best software play and maintained a Buy rating on December 20. With this backdrop, let’s look at what the Street projects for MSFT stock.
What is the Price Target for Microsoft in 2024?
Analysts have a 12-month price target of $423.45, implying 12.84% upside potential from current levels.
Microsoft is aggressively investing in AI and integrating it across products. This is positively impacting its financials, especially in the Cloud business. Further, the focus on launching new products and AI innovations bodes well for growth, keeping Wall Street analysts optimistic about its prospects.
MSFT stock has 36 Buy and one Hold recommendations for a Strong Buy consensus rating.
Bottom Line
Microsoft is expected to benefit from the shift towards the cloud and increase software spending in 2024. Moreover, its AI investments and integration of the same into its product offerings provide a multi-year growth opportunity, as reflected in analysts’ consensus ratings. However, as MSFT stock has gained significantly, analysts’ average price target shows limited upside potential.
