Microsoft ‘s (MSFT) annual IT conference kicks off this week, as the software giant continues to lead the way on artificial intelligence — bolstering investor confidence and the company’s share price. Starting in-person Tuesday in Seattle and livestreamed from Wednesday, Microsoft’s “Ignite” event consists of three days of product announcements and various keynotes from technology executives. And it could be a catalyst for shares if management were to provide more details around the benefits and use cases of its AI-integrated offerings, according to recent Wall Street research. At the Club, we’ll be looking for initial evidence of a return on investment (ROI) for Microsoft’s AI products — particularly the company’s recently launched AI assistant, 365 Copilot . We’d like to see figures quantifying productivity gains for existing customers of Copilot in order to understand how businesses have benefited from using the Microsoft Office add-on. Shares of Microsoft were trading up more than 1% Tuesday, at around $370.70 apiece. MSFT YTD mountain Microsoft (MSFT) year-to-date performance Piper Sandler reiterated the Club’s take that evidence of early adoption around Copilot, along with ROI, could be bullish for Microsoft. The tool, which the company began selling on Nov. 1, costs $30 per user each month. On Sunday, analysts at Piper Sandler reiterated a previous forecast that Copilot could rake in over $10 billion in annualized revenue by 2026. “[Ignite] could emerge as the next catalyst that reinforces our bullish stance on [Microsoft], which remains in the early stages of capitalizing on a first-mover advantage in generative AI,” they wrote in a research note. Elsewhere, Wells Fargo said it is anticipating more than 100 product announcements around AI at Ignite. Analysts at the bank will be looking for potential commentary around a recent Bloomberg report contending Microsoft is collaborating with Advanced Micro Devices (AMD) on a new AI chip. Such a move could reduce Microsoft’s costly reliance on Nvidia’s chips (NVDA) to help power its large language models, Wells Fargo analysts argued in a research note Tuesday. At the same time, Wells Fargo analysts said they’ll be looking for fresh guidance around Copilot, which the firm expects could garner as many as 400 million potential users. That’s four times the size of other Microsoft-owned segments like GitHub, a popular software development platform. Bottom line Microsoft stock, up more than 54% year-to-date, has surged in 2023 on the generative AI boom. If the Ignite conference provides further evidence that Microsoft’s large bet on AI is paying off, it would likely be positive for the stock. Microsoft has made a cumulative investment of roughly $13 billion in OpenAI , the startup behind ChatGPT. Earlier this year, the firm launched a new AI-integrated version of its search engine Bing that relies on the large language models that power ChatGPT. Microsoft has managed to remain profitable despite its massive long-term investments in AI. During its fiscal first-quarter results late last month, the tech giant posted its biggest earnings beat in more than two years on revenue acceleration from its cloud-computing segment Azure. Shares of Microsoft have since hit record highs. (Jim Cramer’s Charitable Trust is long MSFT, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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Microsoft‘s (MSFT) annual IT conference kicks off this week, as the software giant continues to lead the way on artificial intelligence — bolstering investor confidence and the company’s share price.