BNP Paribas Upgrades Microsoft Stock on Copilot Breakthrough

BNP Paribas analysts upgraded Microsoft (MSFT:NASDAQ) to Buy from Neutral, setting a new price target of $500, driven by expectations that Copilot AI revenue will far exceed Wall Street estimates.

Rating Change

• Previous Rating: Neutral
• New Rating: Buy
• New Price Target: $500 (from $420)

Analyst Rationale

The analysts believe Copilot adoption within Microsoft 365 is accelerating faster than expected, potentially adding $10-15 billion in revenue by fiscal 2027. They also highlight Microsoft's competitive advantage in monetizing AI through its vast customer base.

Context

The upgrade follows a strong performance for Microsoft stock, up 25% year-to-date. Other analysts, such as Goldman Sachs, also rate the stock Buy but with a lower $480 target.

What to Make of It

The upgrade reflects growing optimism about Microsoft's ability to generate significant returns from its AI investments, but investors should monitor execution and competition in the space.