Microsoft (NASDAQ:MSFT) stock got a jolt on Thursday after the corporate announced the launch of a latest product to assist information technology and security professionals do their jobs higher.
Microsoft’s Copilot for Security is being touted as the primary generative artificial-intelligence (GenAI) solution for the cybersecurity industry. Wall Street analysts are bullish on the launch, seeing this latest product as one other growth lever throughout the company’s portfolio of AI-fueled products.
Microsoft stock hit an all-time high of $427 per share on Thursday morning but has since dropped back to roughly $417 per share on Friday. 12 months thus far, Microsoft stock is up by about 13%, and it has climbed 52% over the past 12 months.
Given the stock’s rapid rise to an all-time high, investors could also be wondering if it’s too late to purchase shares.
Analysts remain bullish on Microsoft
Copilot for Security, set to debut Apr. 1, is designed to perform more quickly and accurately in addressing threats, with its capabilities informed by the over 78 trillion security signals processed by Microsoft every day. Experienced security professionals who used the product in its testing phase said it was, on average, 22 times faster and 7 times more accurate than their previous systems. The truth is, 97% said they wanted to make use of Copilot for Security the subsequent time they do the identical task.
The software contains a pay-as-you-go licensing model, which is supposed to make it more accessible than other products because billing relies on how often it’s used. This approach allows users to administer their usage and higher control costs based on their needs and budget. Copilot for Security will probably be rolled out worldwide, as it might probably process and respond in eight languages and has a multilingual interface for 25 different languages.
Several analysts weighed in on the news. In a research note, Wells Fargo (NYSE:WFC) analysts said the pricing model should encourage rapid adoption. Additionally they expect it so as to add incremental earnings growth to the Azure platform in Microsoft’s fiscal fourth quarter, which ends June 30, and into fiscal 2025. Wells Fargo analysts maintained their Obese rating on Microsoft and bumped up their price goal to $460, which can be 10% higher than the present share price.
Mizuho Securities analyst Gregg Moskowitz had the same take, saying that the pricing model “will provide businesses a low-cost opportunity (initially) to pursue interesting cybersecurity use cases,” in keeping with Investors Business Each day. He maintained his Buy rating and price goal of $450 per share.
JPMorgan Chase (NYSE:JPM) analyst Mark Murphy sees this GenAI product making a “paradigm shift” for Microsoft in its security capabilities. He also sees Copilot for Security being a differentiator for the corporate within the marketplace. Murphy reiterated his Obese rating and $440 price goal for Microsoft.
Is Microsoft still a buy?
Microsoft’s leadership position in GenAI has largely driven its earnings over the past couple of years, and within the last earnings report, CEO Satya Nadella said the corporate is just scratching the surface.
“We’ve moved from talking about AI to applying AI at scale,” Nadella said within the fiscal-Q2 earnings release on Jan. 30. “By infusing AI across every layer of our tech stack, we’re winning latest customers and helping drive latest advantages and productivity gains across every sector.”
Copilot for Security appears to be an example of that strategy.
Typically, when a stock races as high as Microsoft’s has in a span of slightly greater than a yr, it could raise some red flags about its valuation. Nevertheless, Microsoft continues to be at a comparatively decent valuation at 31 times forward earnings, which is higher than the S&P 500’s average, although Microsoft actually has more earnings power than the typical S&P 500 company.
Microsoft stock did drop a bit on Friday after hitting the all-time high on Thursday. It was down 2% on the day to around $417 per share, which might be not a foul thing. Given the corporate’s outlook and strength in AI, the analysts’ price targets seem pretty reasonable.