Microsoft's 'iPhone Moment' With M365 Copilot: Analysts Predict $10B+ AI Revenue Surge By 2025

Microsoft Corporation +2.35%

Microsoft Corporation

MSFT

411.65

+2.35%

With the M365 Copilot slated to release on Nov. 1, analysts at Piper Sandler are lauding it as Microsoft Corp’s (NASDAQ:MSFT) ‘iPhone Moment’.

After Microsoft successfully launched and grew its Cloud offering into a $125 billion revenue franchise in a matter of five years (2018-2023). Piper Sandler analysts sees Microsoft AI capitalizing “on a first-mover advantage in generative AI” and “estimate Microsoft AI could scale 20x eclipsing $10BN by F2025E on broader M365 Copilot adoption.”

For perspective, Azure and AWS took roughly 10 years to reach that revenue figure.

Related: Microsoft Has Significant Monetization Opportunity From AI-driven Productivity: Analysts

The MSFT Analyst

Piper Sandler analysts Brent A. Bracelin and Hannah Rudoff currently rate MSFT stock Overweight with a price target of $425 (based on 31x CY25E vs. 5-year average of 28x).

“We remain buyers of MSFT on positive news flow into year-end on new AI products and user events across Microsoft, OpenAI, and GitHub,” they said in the note.

The MSFT Takeaways

Over the long term, they see Microsoft AI as having a $100 billion scale potential. Revenue from Microsoft AI is currently very small at $0.5 billion per last quarter. The firm recognized three catalysts that could help MSFT achieve those levels:

  • the unprecedented pace of innovation
  • aggressive AI investments, and
  • broad enterprise reach

MSFT Stock Price Action

Price Check: Shares of Microsoft were up 1.59% to $335.07 at the time of publication Monday.

Microsoft’s stock has a number of catalysts lined up in November:

  • The GA release of M365 Copilot on Nov. 1
  • The OpenAI DevDay event, Nov. 6
  • GitHub Universe 2023 user event, Nov. 8
  • Microsoft Ignite user conference between Nov. 14-17

Now Read: Why Mark Zuckerberg Believes Meta AI Integration Will Be ‘Game Changing’ For Threads

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