On Friday, Microsoft (MSFT) stock crossed into a buy point following the announcement that AI tools would be added to Office productivity applications.
Microsoft has unveiled Microsoft 365 Copilot, which is being incorporated into widely used applications like Word, Excel, PowerPoint, Outlook and Teams.
Microsoft has not revealed its monetization plans for Copilot, a software which utilizes advanced AI to streamline and simplify tasks. The technology is currently undergoing testing with a few commercial clients.
Microsoft announced Business Chat, which enables users to access Office apps, calendars, emails, chats and more for a streamlined experience.
Microsoft stated that Business Chat can generate a status update based on the morning’s meetings, emails, and chat threads when users provide natural language prompts like “tell my team how we update the product strategy.”
There has been an increase in Microsoft stock prices due to news regarding artificial intelligence.
In a news release, Jared Spataro, Microsoft corporate vice president for modern work and business applications, noted that Copilot utilizes contextual information to deliver relevant and actionable results. According to Spataro, the application is enterprise-ready thanks to Microsoft’s comprehensive approach to security, compliance, privacy and responsible AI which makes this a transformative period in computing.
Microsoft stock increased by 2.3% to 282.65 in this morning’s trading session, surpassing a flat base buy point of 276.86, as indicated on the IBD MarketSmith charts.
The copilot has been found to have a significant impact on productivity.
Mizuho Securities analyst Gregg Moskowitz stated in a note to clients that Copilot is an advancement in AI-driven productivity.
Moskowitz reaffirmed his buy rating on Microsoft stock and increased the price target to 315 from 300.
He stated that Microsoft 365 Copilot will increase productivity for users and that they have found many AI applications in both consumer and enterprise tasks.
On Thursday, Microsoft demonstrated Copilot’s capabilities at a presentation. It can create content from work files with voice or text commands like “create a slide presentation,” “check sales data” and “organize my email inbox.”
It will be challenging for competitors to match.
Oppenheimer analyst Timothy Horan noted that Microsoft 365 Copilot is challenging for competitors to replicate, due to their large user base of 1.5 billion, in addition to access to OpenAI technology.
Additionally, he observed that Google, an Alphabet subsidiary, and Salesforce released similar announcements coinciding with Microsoft’s presentation.
Analyst Brad Zelnick of Deutsche Bank maintained his buy rating on Microsoft stock following the event.
According to Zelnick, Microsoft 365 Copilot is expected to mature and become integrated into workflows, promoting productivity and business value. Microsoft’s main objective is to provide more with less.
Microsoft stock is a strong long-term investment.
Karl Keirstead, an analyst at UBS, maintained a neutral rating for Microsoft stock but increased the price target to 275 from 250.
He stated that Microsoft still has challenges related to Copilot such as leveraging the technology for profit and showcasing its practical benefits.
The productivity gains from the technology, which allowed for a range of tasks such as creating presentations, filtering and summarizing emails, drafting Word documents and creating Excel templates among other functions, were apparently substantial, leading to the possibility that the demo may have impressed skeptics.
Microsoft stock is part of the IBD Long-Term Leaders Portfolio.
