Goldman Sachs Lifted The Microsoft Stock Target To $400
The analysts of Goldman Sachs have lifted the price target for Microsoft stock amid improved fundamentals and the AI boom. Earlier, Goldman Sachs had set a $350 target for Microsoft Corp, which is now revised higher to $400 per share.
After the recent upgrade of the price target, Goldman Sachs has joined dozens of other analysts who are forecasting a $400 target for Microsoft stock. If the Goldman Sachs forecast turns out to be true, that would be an upside of 15.3% from the stock's current levels.
Recently, Microsoft has launched a new product dubbed 'Microsoft 365 Copilot,' which will be introduced to a 380mm user base. In addition, the base price for this AI-powered product is $30 per month. Based on these calculations, a $135 billion TAM over the long term will become highly likely.
By the end of the financial year 2026, Microsoft will likely achieve 15% to 30% of the above-mentioned opportunity. All of this easily translates to more revenue and, thus, better fundamentals over the long run.
20% Growth In Microsoft Cloud
Goldman Sachs has also forecasted a 20% growth in the Microsoft Cloud, which contains Office, Azure, & other products. They also added that there's an increased potential for growth as businesses around the world embrace the AI revolution. In the case of Microsoft, it appears that the AI boom is already showing results!
Similarly, Goldman Sachs also predicted that the deceleration in Azure will stabilize in the upcoming months as AI workloads will be integrated. For Q4 2023, a 27% growth is expected which will push the ratio of revenue/EPS growth to around 8%.
Overall, the sentiment surrounding Microsoft stock is bullish as pretty much all the major analysts are calling for more upside. If Goldman Sachs & other analysts are true, it would mean a jump of 15.3% in Microsoft's stock prices.
Similarly, other tech companies which will embrace the AI revolution by introducing AI-powered products/services will also receive a jump in the stock market.