Piper says formal release of M365 Copilot ‘an iPhone moment’ for Microsoft

Piper Sandler sees the formal release of M365 Copilot this week as an “iPhone moment” for Microsoft as part of a broader strategy to capitalize on a first-mover advantage in generative AI. Similar to the Microsoft Cloud opportunity that began in 2008 that has now grown into a $125B-plus revenue franchise, Piper sees Microsoft AI having similar $100B-plus scale potential longer-term. While Microsoft AI revenue is small at an estimated $0.5B last quarter, the unprecedented pace of innovation, aggressive AI investments, and broad enterprise reach could result in Microsoft AI scaling to $10B-plus in revenue within three years, the firm adds. Piper has an Overweight rating on the shares with a price target of $425.