Intel stock spikes after report of possible US government stake
On Friday, Bernstein SocGen Group analysts increased the price target for Microsoft stock (NASDAQ: MSFT) to $540 from a previous target of $520, while maintaining an Outperform rating. Currently trading at $471.46 with a market capitalization of $3.5 trillion, Microsoft’s stock is trading near its 52-week high. The adjustment comes as analysts see potential for significant revenue growth stemming from Microsoft’s partnership with OpenAI, with InvestingPro data showing 25 analysts have recently revised their earnings estimates upward.
The analysts highlighted the potential for Azure, Microsoft’s cloud computing service, to benefit from the collaboration with OpenAI. They believe that if OpenAI’s projections materialize, Azure could see substantial revenue upside by 2029/30. The partnership positions Microsoft as a key strategic partner for OpenAI, potentially extending Azure’s growth trajectory beyond current expectations. This aligns with Microsoft’s strong performance, as indicated by its 14.13% revenue growth over the last twelve months.
The analysts have slightly increased their revenue forecasts for Microsoft’s fiscal year 2027, along with earnings per share estimates for fiscal years 2026 and 2027. This adjustment reflects the anticipated impact of the OpenAI collaboration on Microsoft’s financial performance.
As a result of these projections, Bernstein SocGen analysts have raised Microsoft’s target valuation multiple from 28.5x to 29.5x. They emphasize that the majority of the potential upside remains beyond the current forecasting period, reinforcing their positive outlook on the stock with the Outperform rating.
In other recent news, OpenAI has introduced a new ChatGPT record mode for Team users on macOS, allowing the capture and transcription of meetings, brainstorms, and voice notes. This feature will soon extend to Plus, Pro, Enterprise, and Edu users. OpenAI also reported a rise in paying business users, now totaling 3 million, up from 2 million in February. Meanwhile, Microsoft Corp (NASDAQ:MSFT). has announced a significant reorganization, with LinkedIn CEO Ryan Roslansky taking charge of the teams developing email and productivity apps as part of an AI-focused strategy. Additionally, Microsoft is offering a free cybersecurity program to European governments to enhance their defenses against AI-augmented cyber threats. The company has also recently laid off over 300 employees, following a previous reduction of 6,000 roles, as it continues to adjust its workforce in response to its AI investments. In the startup world, Liam Fedus, a former vice president at OpenAI, is raising over $100 million for his new venture, Periodic Labs, which will focus on AI for material science. Another group of former OpenAI employees has secured seed funding from Benchmark for a new startup concentrating on reinforcement learning.
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