Artificial intelligence (AI) is a growing and increasingly controversial market. For tech giant Microsoft (MSFT), it is a new market, and one that it is pushing harder into. Perhaps too hard, as some investors are watching Microsoft’s upcoming returns carefully for signs of trouble. Indeed, Microsoft shares were down fractionally in Monday afternoon’s trading as a result.
Microsoft may be one of the biggest names in AI around right now, thanks to their connection to OpenAI, which owns ChatGPT. However, Microsoft’s own AI products, according to a report from Reuters, are not having the kind of uptake investors would prefer. The $30 per month Copilot assistant, for example, is facing “slow adoption” rates.
That led Morgan Stanley analysts to describe a “wall of worry” around Microsoft and its upcoming earnings. Investors believe that Microsoft put a whole lot into AI, but the returns are not materializing as they perhaps should be. Indeed, estimating Microsoft’s performance this quarter just got a lot harder, the reports noted, thanks in large part to that one big destabilizing move into AI that makes comparisons to previous quarters much more difficult.
Modifying Teams
But Microsoft is more than the sum of its artificial intelligence developments, and Microsoft Teams is one of its biggest such applications. Now, it is rolling out some new features therein, combining its chats and channels interfaces into one package.
That addition will start up soon, and by mid-2025, reports from The Verge note, threaded conversations will also swing in. The end result should be a simpler, easier-to-use interface so that everyone who uses Teams now will be able to get more out of it. While chats and channels can be kept separate, users will also have the option to set up custom sections where they can group their conversations together.
Is Microsoft a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 27 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 27.72% rally in its share price over the past year, the average MSFT price target of $503.15 per share implies 17.66% upside potential.
