Tech titan Microsoft (NASDAQ:MSFT) plans to grow its Artificial Intelligence (AI) and Cloud infrastructure in Spain. The company will invest $2.1 billion over the next two years in the region, Brad Smith, MSFT’s vice chair and president, announced on social media platform X.
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This news comes on the heels of its announcement of a €3.2 billion ($3.4 billion) AI infrastructure-focused investment in Germany last week.
The company is strengthening its AI and cloud infrastructure in targeted markets and is integrating artificial intelligence across its array of products and services. This should help MSFT win new customers and drive productivity gains. Let’s delve deeper.
Microsoft’s AI Bet Is Paying Off Well
It’s worth emphasizing that Microsoft’s integration of AI across its products is paying off well. In a note to investors dated January 31, TD Cowen analyst Derrick Wood highlighted that the company’s robust growth is primarily driven by artificial intelligence. Wood is bullish about MSFT stock. His price target of $455 implies 12.61% upside potential from current levels.
Notably, Microsoft Cloud exceeded $33 billion in revenue in Q2 of Fiscal 2024, up 24% year-over-year, driven by AI. MSFT’s Azure, which offers AI training and inference, gained market share in Q2. The company had 53,000 Azure AI customers at the end of the second quarter.
Looking ahead, MSFT expects the momentum in its business to sustain and benefit from AI-led tailwinds.
Is Microsoft a Buy, Sell, or Hold?
Microsoft stock is up about 61% in one year, reflecting solid financial performance. Further, analysts remain upbeat about its prospects.
MSFT stock has 32 Buy, one Hold, and one Sell recommendations for a Strong Buy consensus rating. Analysts’ average price target of $469.45 implies upside potential of 16.18% from current levels.
