Tigress lifts Microsoft stock target to $595 on AI prospects

On Thursday, Tigress Financial Partners maintained a positive outlook on Microsoft Corporation (NASDAQ:MSFT), raising the 12-month price target for the tech giant’s shares from a previous target to $595. The firm continues to endorse a Buy rating for the stock, attributing the optimistic valuation to Microsoft’s aggressive advancement and integration of artificial intelligence (AI) technology, which is anticipated to spur growth across all of the company’s critical business segments. This optimistic outlook aligns with broader market sentiment, as InvestingPro data shows 19 analysts have recently revised their earnings estimates upward, with the stock maintaining a highly bullish consensus rating of 1.39 out of 5.

The research firm highlighted Microsoft’s position at the vanguard of the AI revolution, noting the company’s strategic incorporation of ChatGPT and other AI functionalities into its products and services. This integration is expected to not only enhance Microsoft’s business performance but also accelerate the ongoing digital transformation on a global scale. The company’s strong market position is reflected in its impressive $2.91 trillion market capitalization and robust revenue growth of 15% over the last twelve months. For deeper insights into Microsoft’s valuation and growth metrics, InvestingPro offers a comprehensive analysis with over 30 key financial indicators.

According to Tigress Financial Partners, the deployment of AI across Microsoft’s product lines, coupled with the sustained expansion of its cloud infrastructure and growing customer adoption of AI solutions, will contribute to a trend of accelerating business performance. The firm’s analyst underscored the potential for these developments to boost the company’s revenue and cash flow.

The analyst’s commentary also pointed to Microsoft’s robust financial position, emphasizing the strength of its balance sheet and substantial cash flow. These financial resources are seen as key enablers for the company to continue pursuing growth initiatives, strategic acquisitions, and to further enhance shareholder value through potential dividend increases and share repurchases.

Microsoft’s commitment to integrating AI into its business operations and product offerings is expected to position the company as a prominent player in the digital transformation landscape, which Tigress Financial Partners views as a compelling investment opportunity for shareholders. The revised price target reflects the firm’s confidence in Microsoft’s strategic direction and its potential for sustained financial performance.

In other recent news, Microsoft Corporation has received a Sector Outperform rating from Scotiabank (TSX:BNS), with a price target set at $470. The bank is optimistic about Microsoft’s investments in artificial intelligence, particularly in its Azure and Microsoft 365 Copilot offerings, which are anticipated to significantly drive growth. Analyst Patrick Colville from Scotiabank projects that AI will contribute nearly 60% of Microsoft’s incremental revenue by fiscal year 2027. In parallel developments, OpenAI is undertaking a $100 billion Stargate project in Texas, aimed at creating one of the largest AI computing power clusters, featuring up to 400,000 Nvidia (NASDAQ:NVDA) AI chips. This massive infrastructure is expected to be operational by mid-2026 and is designed to support advanced AI workloads.

Additionally, AI agents are gaining traction in the digital search market, with Wells Fargo (NYSE:WFC) reporting a notable increase in their usage share in February, impacting traditional search engines like Google (NASDAQ:GOOGL) and Bing. OpenAI has also enhanced its ChatGPT models with Python-powered data analysis capabilities, enabling users to perform complex data tasks such as regressions and scenario-based simulations. Moreover, OpenAI has submitted a proposal to the U.S. government advocating for minimal regulatory interference to accelerate AI advancements, as part of the "AI Action (WA:ACT) Plan." These recent developments highlight significant advancements and strategic moves in the AI sector, affecting major players like Microsoft and OpenAI.

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