Wedbush calls Microsoft Corp (NASDAQ:MSFT) the “Scottie Scheffler of software”: steady, world-class, and at the top of its game.
The investment bank expects more good news when the Silicon Valley updates investors next week, driven by the company’s front-runner status in artificial intelligence (AI).
So what’s the big story?
Microsoft is leading a new wave of AI adoption among big companies, think banks, retailers, and governments, all looking to work smarter.
Wedbush believes that over 70% of Microsoft’s existing business customers will be using these AI features within three years, changing the shape of the company’s growth.
This shift is about more than just clever tech. Microsoft is expected to pull in as much as $25 billion in new annual sales by 2026 as tools like Copilot (its AI assistant) get woven into Office and other products.
To keep up, Microsoft is planning to spend around $80 billion next year alone on new data centres, the “engine rooms” that make all this AI possible.
Even with fierce competition from Amazon and Google, Wedbush thinks Microsoft has the edge.
It sees the business on track to hit a $4 trillion valuation soon, and even $5 trillion is “on the docket” for the next 18 months. That’s why their price target is now $600 a share.
Wedbush’s investment case is clear: Microsoft’s AI and cloud businesses are only just getting started, and the rest of the market hasn’t fully woken up to the scale of the opportunity.