2. Microsoft Corp (NASDAQ:MSFT)
Number of Hedge Fund Investors: 293
Dan Ives is highly bullish on the Redmond software company, saying on Twitter recently that he was seeing a “tidal wave of Copilot and Azure monetization” on the “doorstep” of Microsoft. Ives also increased his price target on MSFT to $550 from $500.
Last year, The Information reported that Microsoft Corp (NASDAQ:MSFT) was working on its own AI chips under a project codenamed “Athena,” to cut its reliance on Nvidia. UBS said in its latest report that Athena chips, along with Azure, position Microsoft Corp (NASDAQ:MSFT) to benefit from the opportunities in enabling layer in the AI value chain, while the firm named the company’s OpenAI investment as an opportunity in the intelligence layer. Copilot, Office and GitHub will help Microsoft Corp (NASDAQ:MSFT) profit in the application layer of AI, UBS believes.
Many Wall Street analysts are bullish on MSFT. New Street Research started covering the stock with a Buy rating. The firm said that Microsoft Corp (NASDAQ:MSFT) is well positioned to grow profit in the “low teens for years to come” even if the AI revolution fails to pan out. New Street Research has a $570 price target on Microsoft Corp (NASDAQ:MSFT).
Analysts believe Microsoft Corp’s (NASDAQ:MSFT) AI ecosystem around its products would strengthen its Cloud division thanks to Microsoft Corp’s (NASDAQ:MSFT) integration of AI into its Cloud products. Microsoft Corp’s (NASDAQ:MSFT) Intelligent Cloud segment’s profit in the latest quarter totaled $12.51 billion, a whopping 32% growth on a YoY basis.
Mar Vista Focus strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its first quarter 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) continues to occupy a strong position, poised to capture market share as businesses navigate the transition to a digital-first landscape and embrace generative AI-driven solutions. The company’s commanding presence in the enterprise arena, combined with its comprehensive product portfolio encompassing Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS), establishes it as a crucial provider of IT solutions for companies of all sizes.
Microsoft is effectively executing its strategy in a sizable market by offering a roadmap for digital transformation and adoption of AI-driven solutions, such as ChatGPT, while enhancing productivity and reducing costs. Consequently, we anticipate that Microsoft’s solutions should exhibit resilience even in a more challenging macroeconomic environment, supporting low double-digit growth in intrinsic value within our investment horizon.”
