Truist analyst Joel Fishbein believes that Microsoft stock has significant upside potential due to the company’s advancements in artificial intelligence (AI). In a recent note, Fishbein initiated coverage of Microsoft with a Buy rating and set a three-year price target of $600, which suggests a 60% increase from the stock’s previous closing price of $374.38.
Fishbein’s optimism stems from Microsoft’s early investments in AI, which have positioned the company to become a leader in this rapidly growing market. In 2019, Microsoft made a $1 billion investment in OpenAI, the parent company of the popular generative AI software program, ChatGPT. As a top investor in OpenAI, Microsoft plans to leverage AI capabilities in its various programs, including Microsoft Copilot.
While acknowledging Microsoft’s impressive execution in the generative AI market so far, Fishbein believes that the company has the potential to exceed expectations as projects progress into production. He also anticipates that Microsoft will continue to benefit from AI advancements for the next decade.
Frederick Havemeyer, an analyst at Macquarie, shares a similar perspective on Microsoft’s future prospects. With an Outperform rating and a price target of $430, Havemeyer expects the monetization of Microsoft Copilot to contribute to share price growth over the coming years.
Currently, Microsoft stock is trading at $377.59 in premarket trading, reflecting a year-to-date gain of 56%.