Jefferies: Microsoft (MSFT)'s Copilot Upgrades Are Its Biggest Since Teams

We recently published a list of 10 AI Stocks on Wall Street’s Radar. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other AI stocks on Wall Street’s radar.

Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.  On May 23, Jefferies analyst Brent Thill reiterated a “Buy” rating and $550.00 price target on MSFT.

Thill discussed key highlights from Microsoft’s recent event, which centered around its AI capabilities. The company plans to enhance Microsoft Copilot, incorporating reasoning capabilities through the addition of Researcher and Analyst agents. Albeit its adoption is in early stages, the company has plans to expand Microsoft Copilot’s use.

Discussing further, the firm also noted how Microsoft boasts a robust financial position. Its revenue is growing at a good rate, while it also has strong profitability metrics. These factors back Microsoft’s aggressive AI expansion strategy. However, there is one challenge that may limit Copilot’s broader integration, which is the need for improved data access and governance. Nevertheless, overall market sentiment is cautiously optimistic.

The company is also striving to establish itself as a central hub for AI by promoting an open platform approach. Microsoft’s CEO has also shared that Copilot updates are the most significant ever since Teams launched, signaling a major AI leap. The firm shares this enthusiasm.

Moreover, additional features such as Copilot Search and Copilot Memory are anticipated to enrich the tool’s functionality. All in all, investors are very focused on Microsoft’s stock performance and endeavors in the AI domain, while the firm is overall bullish on its direction and overall potential for growth.

“We attended MSFT Build in Seattle and came away with 5 key takes: Copilot gains reasoning via Researcher & Analyst agents, rolling out over the coming months; Copilot adoption is still early but intent to roll out strong; Data access & governance cited as biggest barriers for Copilot; Macro sentiment remains cautiously optimistic w/ MSFT seen as a safe haven; MSFT is leaning into an open platform to be the AI hub.”

Overall, MSFT ranks 2nd on our list of AI stocks on Wall Street’s radar. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.