Think you lost the chance to become wealthy when you missed Nvidia’s (NASDAQ:NVDA) trillion-dollar capitalization boom? Or do you regret missing iPhone maker Apple’s (NASDAQ:AAPL) current rally? Think again! Tech giant Microsoft (NASDAQ:MSFT) is the new kid on the block, with a steadily rising stock price. On June 15, MSFT stock rose 3.7% to hit a new all-time high of $349.84 before finally calling the day up by 3.2%.
The Bing and Office 365 Suite maker’s stock has gained nearly 46% year to date, with a 26.3% increase coming in the last three months. In the past five days alone, MSFT stock has climbed 6%. This upward trend indicates the potential for further growth and presents an opportunity for investors to capitalize on Microsoft’s success.
Why did Microsoft Stock Hit a New All-Time High?
Yesterday, two famed Wall Street analysts increased price targets on MSFT stock while maintaining their Buy rating. These rating upgrades follow recent comments from the company’s executives that claim Microsoft is on track to earn $10 billion in annual recurring revenue (ARR) from the generative artificial intelligence (AI) business.
On June 12, Kevin Scott, chief technology officer of MSFT, specified how the additional revenue would come, prompting a series of price target upgrades by analysts. He said, “There is all of the people who want to come use our infrastructure, whether they’re training their own models, whether they are running an open-source model they’ve got, or whether they are making API calls into one of the big frontier models that we’ve built with OpenAI.”
Here’s What Analysts are Saying
J.P. Morgan analyst Mark Murphy pumped the price target to $350 (from $315). Murphy believes Microsoft is on the path to capitalizing on the multi-billion-dollar AI/ChatGPT investments alongside powering its Security, Teams, and Power Apps businesses in the Azure segment. Plus, he is optimistic that Microsoft’s workforce reductions will lead to improved efficiency.
Similarly, analyst Gregg Moskowitz of Mizuho Securities lifted the price target on MSFT to $360 (3.4% upside potential) from $340, after attending the company’s annual cybersecurity summit. The five-star analyst is highly optimistic about Microsoft’s cybersecurity platform, which bodes well for boosting demand in the tech security arena. Most importantly, he views Security Copilot as a “standalone monetizable opportunity” under the firm’s umbrella.
Is Microsoft a Safe Long-Term Investment?
The Street is surely betting on the long-term appreciation of MSFT stock. Although, after the recent rally, the current average Microsoft price target of $347.12 implies that shares are almost fully valued at current levels, analysts continue to expect a robust performance from the company in the long run. As per popular belief, Microsoft is yet to leverage its OpenAI investments, which have started to gain traction recently.
On TipRanks, MSFT commands a Strong Buy consensus rating based on 30 Buys, four Holds, and only one Sell rating.
