Microsoft's 'iPhone Moment': Shares Dip But Analysts Remain Positive After Ignite Event

Microsoft’s MSFT shares were lower in morning trade on Friday. Tech stocks were sold off on all the major indices.

This week, the company held its annual Ignite conference. It unveiled a range of new and updated artificial intelligence (AI) and cloud offerings. One analyst equated the Copilot, the company’s AI assistant based around Bing Chat, to an “iPhone moment.”

KeyBanc analyst Michael Turits maintains an overweight rating and a $420 price target, while Piper Sandler analyst Brent Bracelin made no change to the company’s overweight rating and $425 price target.

Here are their takes on the event.

• KeyBanc: Turits praised Copilot’s additional segments and two new Azure Chips — Azure Maia, built for generative AI tasks, and Azure Cobalt designed to run workloads on Microsoft Cloud. These announcements are “a positive step” in improving overall cloud and AI workload performance, he said. They also reduce the higher costs associated with generative AI tasks.
  
• Piper Sandler: Bracelin was impressed with the new chip rollouts and Microsoft’s increasing security ambitions. He detected “early signs of enterprise FOMO and risk of falling behind that could in turn help justify higher AI budgets into 2024 and 2025.” News flow from day two of the conference will be favorable for MongoDB MDB and Oracle ORCL as tailwinds begin to surface across the database layer.

The Wolfe Byte

Wolfe believes Microsoft may have created an “iPhone moment” for Copilot.

“We view the potential for Microsoft to monetize Copilots across the entire customer base because the incremental functionality, network effect and ability to integrate across every application is quite literally a killer-app.”

Copilot could create a double-digit upside to both FY2026 consensus revenue and earnings per share.

“Copilot’s connectivity to other applications creates a first-mover advantage that will enable MSFT to dominate wallet and mind-share and create incremental friction for other SaaS vendors to monetize their own agents.”

Price Action: Microsoft’s stock fell 1.16% to $371.80 on Friday. However, the Redmond, Washington-based company saw its stock climb 9.8% since the end of October.

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