Microsoft's Pace Of Integration Of ChatGPT Across Portfolio Impresses Analysts

Piper Sandler analyst Brent Bracelin maintained Microsoft Corp MSFT with an Overweight and raised the price target from $247 to $290 on untapped AI potential using a higher multiple.
OpenAI's ChatGPT has captured the world's attention in 60 short days, thanks to the novel and disruptive role of AI transformer models.
The biggest surprise to the analyst relative to the new AI-powered Bing conversation engine is the pace at that AI transformers got integrated across the entire portfolio.
Share gain potential in a $500B+ digital ad market is enticing, but AI disruption has far-reaching potential across consumer and enterprise segments.
Bottom-line, it took about nine years for Microsoft Cloud to reach $40B+, and the analyst thinks it plausible for Microsoft AI to reach $40B + in half the time.
Long-term margin could also remain intact, assuming capex is slightly higher.
Mizuho analyst Gregg Moskowitz maintained a Buy and raised the price target from $280 to $300.
MSFT announced a new AI-powered version of the Bing search engine and Edge browser and held an investor call.
The new AI enhancement enables Bing and Edge to provide an interactive searching and browsing experience with better search results and chat functions.
Microsoft also underscored a vast opportunity in the digital advertising market and expected revenue and operating income improvement as usage grows.
The analyst saw broad AI applicability across consumers and enterprises, meaningfully influencing the narrative later this year, earlier than expected.
Price Action: MSFT shares traded lower by 0.28% at $266.80 on the last check Wednesday.

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