Microsoft AI Revenue 'Could Eclipse' $10B In 2025, Bullish Analyst Says

Piper Sandler analysts shared expectations for when Microsoft Corporation MSFT announces first-quarter results at the end of October.

Price Target: Piper Sandler analyst Brent Bracelin maintained an Overweight rating on Microsoft shares. He also lowered the price target from $485 to $470. Bracelin pointed to the company's first-quarter guidance and results as possibly being "sloppier than normal" due to KPI model changes. 

New KPIs: Bracelin said the biggest change resulting from the new KPI metrics were seen in the firm's updated fiscal 2024 forecast for Azure, 20% lower at $57.5 billion. The analyst said Microsoft's first-quarter results could come in mixed due to “optical headwinds around changes to new KPI metrics" which may not have been fully priced-in by the Street.

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Microsoft AI: Piper Sandler remains bullish on Microsoft AI and expects revenue from the segment to surpass 10 billion in 2025. The analyst noted the firm has tempered its assumptions on CoPilot. However, it raised its growth expectations for OpenAI to a triple-digit range. 

According to data from Benzinga Pro, the Street expects Microsoft to report quarterly earnings of $3.09 per share and revenue of $64.485 billion when the company reports on Oct. 30 after the closing bell.  

Price Action: According to Benzinga Pro, Microsoft shares are flat at $416.76 at the time of publication Friday.

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