Zinger Key Points
- Wedbushās Dan Ives thinks Microsoft and Satya Nadella are leading the AI arms race right now.
- He expressed optimism about Microsoftās prospects, backed by its increasingly deeper integration of AI features across its portfolio.
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Microsoft Corp.'s MSFT AI announcements at the ongoing Build developer conference have Wedbush's Dan Ives excited about the path forward for the Satya Nadella-led company.
What Happened: In an interview with CNBC, tech bull Ives expressed optimism about how far Microsoft has come with its AI strategy, amid a slew of Copilot-powered announcements at the Build conference.
The primary driver of Ives' enthusiasm is Microsoft's Copilot strategy. "When it started out, we had 3 out of 10 customers looking to go Copilot. Now, it's 7 of every 10. I think it's just been massive in what type of adoption we're seeing."
While Copilot has largely been aimed at business customers, Microsoft unveiled a slew of AI PCs at the Build conference, in partnership with its original equipment manufacturers (OEM) and Qualcomm Inc. QCOM.
Ives described this as a "pivotal week for Microsoft and Nadella in this AI Arms Race."
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Copilot is no longer limited to just software integration now, thanks to Microsoft's "Copilot+ PCs."
The company also announced Copilot AI agents to automate tasks, while developers can now create AI applications more seamlessly thanks to the integration of over 40 AI models directly into Windows 11.
“Our partner checks have been incrementally strong around Copilot deployments with MSFT customers and ultimately we estimate this could add another $25 billion-$30 billion to Redmond's top-line by FY25,” Wedbush said in a note seen by Benzinga.
Leaving Rivals Behind
Ives also thinks Microsoft is ahead of the curve when it comes to the AI arms race, leaving behind rivals like Alphabet Inc.'s Google and Apple Inc.
He reiterated that this is a "1995 moment" and that while the initial AI announcements are done, it's now the turn to integrate them into services. Microsoft has been increasingly integrating AI across its product lineup, from hardware to software, as it seeks to capitalize on the age of AI PCs.
Microsoft also recently made a ā¬4 billion investment to further enhance its cloud and AI infrastructure in France, highlighting the company's focus on keeping its lead in this critical industry.
Price Action: Microsoft's shares were up 0.2% in premarket trading on Wednesday, after closing at $429.04 on Tuesday, according to Benzinga Pro.
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