Gen AI to boost Microsoft’s market value past $3Tn
NEW YORK, UNITED STATES — Microsoft is set to join the elite ranks of companies with a market capitalization exceeding US$3 trillion, thanks to advancements in artificial intelligence (AI).
This projection is made by Morgan Stanley analysts, led by Keith Weiss, who recently revised Microsoft’s price target to US$415, suggesting a potential valuation of around US$3.1 trillion.
Weiss emphasized Microsoft’s ideal positioning to monetize the expansion of generative AI, which is expected to significantly broaden the range of “automatable business” processes.
The viral success of the ChatGPT tool by OpenAI, backed by Microsoft, boosted the company’s shares this year. Plans are now in motion to infuse Microsoft’s entire suite of Office applications — including Excel, PowerPoint, Outlook, and Word — with OpenAI technology.
Despite a 42% surge in Microsoft’s share price this year, Weiss affirms that the valuation remains sensible. The stock’s price-earnings to growth (PEG) ratio, a key indicator for growth-focused investors, remains in line with historical averages, even considering Microsoft’s unparalleled standing in the generative AI realm.
Overall, the sentiment on Wall Street towards Microsoft is overwhelmingly positive, with 52 analysts rating the stock as a buy or equivalent. However, only three analysts forecast Microsoft to attain the historic $3 trillion market cap by next year.
Last month, Apple became the first company to reach a market value of over US$3 trillion.
