Microsoft is on the precipice of reaching its next ‘iPhone moment’ with AI affirming its status as the world’s most valuable company ahead of Apple
Microsoft dethroned Apple as the world’s most valuable company, and it will soon manufacture its own iPhone moment with AI.
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What you need to know
Microsoft’smulti-billion dollar investment in generative AIand its extended relationship with it is seemingly paying off. At the beginning of this year, we saw the tech giant dethrone Apple from its position asthe world’s most valuable company, with $3 trillion in market capitalization.
This change in pace can be attributed to several factors. But, at least according to market analysts, it’s Microsoft’s early investment in AI and the integration of its capabilities across its wide portfolio of products and services that is critical. Building on this premise, 13 market analysts unanimously voted thatMicrosoft will be the world’s most valuable company ahead of Applein the next five years.
As we speak, Microsoft’s stock is miles ahead of Apple’s, with an approximate lead of $500 billion. While appearing at CNBC studios for an interview, Wedbush analyst Daniel Ives indicated that things will get even better for the Redmond giant, citing it’s on the verge of hitting its iPhone moment with AI (viaMarketWatch).
Ives pointed to the rapid growth of Microsoft’s Azure cloud business and the integration of AI capabilities and Copilot across its products as clear indications that the company is well on its way to achieving this milestone.
According to Ives:
“In a nutshell, we see an acceleration of adoption for generative AI and Copilot activity, which in turn is catalyzing more Azure cloud deal flow for [Chief Executive Satya Nadella and his team] with major momentum heading into the next six to 12 months as AI use cases explode across the enterprise landscape.”
The market analyst placed his price target for Microsoft’s stock at $500, up from $475. This represents an 18% upside from Monday’s closing level. Ives' strong belief in Microsoft’s rapid growth and success in the market stems from credible information showcasing how well Copilot AI is performing in the market right now.
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Copilot is a big deal and it’ll continue to grow and evolve
Copilot is important for Microsoft, which explains why we have an AI-powered assistant across all Microsoft products and services. Despite itscomplicated relationship with the ChatGPT maker OpenAI, the company doesn’t seem like it will slow down anytime soon.
In the past few months, OpenAI has been slapped with several lawsuits,from copyright infringement issuestoabandoning its founding missionand opting to go the for-profit way. Be it as it may, Microsoft seems hell-bent on seeing through its AI projects and advances if theCEO Satya Nadella’s wordsare anything to go by:
“We were very confident in our own ability. We have all the IP rights and all the capability. I mean, look, if tomorrow OpenAI disappeared, I don’t want any customer of ours to be worried about it, quite honestly, because we have all of the rights to continue the innovation, not just to serve the products.”
READ MORE:Microsoft contributed to Apple’s success with the iPod
According to Ives, over 70% of Microsoft’s installed base will leverage Copilot’s capabilities, a 10% bump from his previous 60% adoption estimation. He added that Microsoft will likely benefit more from its early investment in the AI wave through the next fiscal year, which he refers to as “the true inflection year of AI growth.” The analyst also indicated the tech giant would make more pricing moves for its services, like the recentintroduction of a paid subscription for Copilot.
Interestingly, another billionaire investor recently indicated thatthe AI boom will be doomed soon,predictably leading to an economic slowdown and inflation. “The faster and higher things go up, the harder they fall,” says DoubleLine Capital CEO Jeffrey Gundlach. He added that the stocks have skyrocketed because of the interest cuts, attracting customers to spend rather than save.
Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry at Windows Central. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. You’ll also catch him occasionally contributing at iMore about Apple and AI. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.
