Microsoft may be on the brink of a watershed moment equivalent to Apple ‘s 2007 iPhone launch, according to Piper Sandler. “We see the formal release of M365 Copilot this week as an ‘iPhone moment’ for MSFT as part of a broader strategy to capitalize on a first-mover advantage in generative AI,” wrote analyst Brent Bracelin in a Sunday note to clients, likening the scale potential to that of Microsoft Cloud in 2008. MSFT YTD mountain Microsoft shares since the start of 2023 The comments from Bracelin come as the software giant readies to launch its Copilot artificial intelligence subscription service offering on Wednesday. The tool, first announced in July, adds AI capabilities to Office products for an additional $30 a month. While AI investments only garnered half a billion in revenue last quarter, Microsoft’s broad AI ambitions could add $10 billion in revenue by 2025 and $100 billion longer term, according to Bracelin’s projections. This feat took Azure and AWS about a decade to accomplish, he noted. This “first-mover AI advantage,” coupled with expectations for a reacceleration in double-digit top-line growth, support the current premium for shares. Bracelin reiterated his overweight rating and $425 price target, implying 29% upside from Friday’s close. That’s on top of a roughly 40% gain so far this year. “We remain buyers of MSFT on positive news flow into year-end on new AI products and user events across Microsoft, OpenAI, and GitHub,” Bracelin said, citing some additional events in November that could boost the narrative. — CNBC’s Michael Bloom contributed reporting.
