The Zhitong Finance App learned that Goldman Sachs Group analyst Gabriela Borges said that Microsoft Corporation (MSFT.US) is sending a clearer signal to investors that its investment in the field of artificial intelligence already has diversified ways to monetize. Boosted by this, Microsoft's stock price recorded its biggest one-day increase in nearly 18 years on Thursday.
In an interview on Thursday, Borges said, “Microsoft's ability to use different levers at the monetization level is revealing more and more clues, and these clues were far less obvious than they are now.”
According to the financial report released by Microsoft on Wednesday, the cloud business growth rate was the fastest since 2022, indicating that its AI and computing services are being recognized by customers, while capital expenditure growth is showing signs of slowing down. Driven by this, Microsoft's stock price soared. Borges maintained its “buy” rating on Microsoft and raised its 12-month target price by 5% to $640, implying an upward margin of about 64% from Wednesday's closing price.
She pointed out, “In the past 6 to 12 months, one of the main arguments that the market has been bearish on Microsoft is that Copilot products have not reached the ideal state.” However, she added that product quality continues to improve, and the rise in the number of users helps create a “positive feedback loop.”
On Thursday in the New York market, Microsoft's stock price rose 17.5% to 458 US dollars, close to the biggest one-day increase since October 2008.
Borges has positioned Microsoft as a “value discovery type” target — currently Google's parent company Alphabet dominates the field of enterprise AI applications, and nearly 90% of the Fortune 100 companies have adopted Google's Gemini enterprise version. However, Microsoft revealed on Wednesday that its 365 Copilot has surpassed 30 million paid seats, a significant increase from the level of about 20 million three months ago, indicating that the adoption rate of its flagship AI assistant on the enterprise side continues to rise.
Borges said that Microsoft had previously “been thrown into the cold house by the market for several quarters,” and investors generally believed that Google was in a leading position. However, she believes that the next 12 months will prove that the gap between the two is “not as bad as people think” and that Microsoft “has made quite significant improvements behind the scenes.”
Borges said that large-scale adoption of Copilot is still in the early stages of exploration. She likened the current stage to “extensive trial and error to find a good product market fit,” but she is confident about the maturity of the application scenario.
“I have no doubt that after 6 months, 1 year later — even looking back at Goldman Sachs's own app experience over the past 12 months — we've made great strides in enhancing our daily work with these tools,” Borges said.