Enacademic 🎓Analogindex

Microsoft gains on new Ignite AI chip plans, Wedbush price target boost

Microsoft MSFT shares moved higher in early Thursday trading after the tech giant detailed strategies to work more closely with AI developers at a key industry conference and analysts at Wedbush boosted the group's price target. Microsoft also said it will start producing its own CPUs in an effort to diversity its dependence from AI chip leader Nvidia NVDA, in a move that is seen as likely to both improve long-term profit margins as it seeks to make it easier to build GPT and AI functionality into its product base. The new chip, called 'Maia', will run large-language models that will ultimately connect to its 'Copilot' product, a service used by enterprise customers to improve their software and business efficiency. Its Azure cloud division, will continue to use chips made by Nvidia and Advanced Micro Devices AMD. Microsoft CEO Satya Nadella described the current AI development stage as a 'tipping point' in his keynote address to the Ignite developers' conference yesterday in Redmond, Washington, adding that "we're not just talking about it as technology that's new and interesting ... we’re getting into the details of product-making deployment, safety, real productivity gains, all the real-world issues." Wedbush analyst Dan Ives, meanwhile, forecast that Microsoft's 2025 fiscal year will provide the "inflection point" for AI growth as more than half of its installed base will be using the new technology in some way. "We believe the stock has yet to price in what we view as the next wave of cloud and AI growth coming to the Redmond story with FY24 with a strong competitive cloud edge vs. Amazon and Google," said Ives, who lifted his price target on Microsoft by $25, to $425 per share, while maintaining an 'outperform' rating on the stock. "Our partner checks have been incrementally strong around Co-Pilot interest/deployments with Microsoft customers and ultimately we estimate this could add another $20 billion to Redmond's top-line by FY25," he added. "We also believe Redmond is just starting to hit its next gear of growth with ChatGPT and AI also adding a new layer of growth to the MSFT story over the coming years." Microsoft shares were marked 0.73% higher in pre-market trading to indicate an opening bell price of $372.40 each, a move that would extend the stock's 2023 gain to around 53% and value the group at just over $2.75 trillion. Late last month, posted stronger-than-expected first quarter earnings it said was powered in part by its early moves into AI technologies, including its 10 billion investment in Chat GPT creator Open AI. Microsoft's flagship cloud offering, Azure, saw a huge increase in customers are the group rolled out AI features, with sales rising 29% from last year, outpacing the 19% gain for its broader Intelligent Cloud division and the 12.7% advance in overall group revenues. Microsoft said it sees Azure growth rates of between 26% and 27% for the current quarter, with revenues for the Intelligent Cloud division pegged between $25.1 billion and $25.4 billion. Microsoft's adjusted earnings rose 27.2% from last year to $2.99 per share, well ahead of the Street consensus forecast of $2.65 per share. Net income rose 20% to $20.1 billion.Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
Read more...

TheStreet

Microsoft stock touches record on Ignite AI chip plans, Wedbush price target boost

Microsoft CEO Satya Nadella described the current AI development stage as a 'tipping point' for the tech industry at the group's flagship developers' conference.

1 viewFormato a Mensajes, 12:51