What a difference a day makes. Microsoft stock (NASDAQ:MSFT) went from being on top of the world after rolling out its AI-related pricing to slipping despite analysts praising the news. Indeed, several analysts, ranging from Mizuho’s Gregg Moskowitz to TD Cowen’s Derrick Wood, all came out in support of Microsoft’s plans.
Moskowitz looked for Microsoft Copilot to mean a revenue boost of as much as $9 billion, assuming that just two out of 10 customers signed up for the upgrade. If less than half, 40%, managed to sign up, that was an extra $19 billion in Microsoft’s coffers and reason enough to hike the price target from $390 to $420. Meanwhile, Wood also hiked his price target, going from $330 to $390 thanks to the AI system. However, Wood also looks for some “mixed demand data points” as a result.
Despite these impressive numbers, Microsoft is still engaging in layoffs. Only yesterday, news emerged about just over 1,000 employees losing their jobs in the last week alone, and that’s not even factoring in the 10,000 jobs that Microsoft planned to cut this year. Most of the 1,000 cut this week came out of customer service and sales as Microsoft plans a whole different way to address its sales and support operations. One internal post asked if the customer support functions were poised to be replaced by the same AI tools Microsoft rolled out.
Still, Microsoft is a heavyweight with analysts. Considered a Strong Buy, Microsoft stock has 31 Buy ratings, three Holds, and one Sell to its credit. However, with an average price target of $364.97, Microsoft offers investors a slight 2.51% upside potential.
