‘Load Up,’ Says Goldman Sachs About Microsoft Stock After attending the maiden New York event, Goldman Sachs analyst Kash Rangan came away impressed with what Microsoft has to offer and all that’s in the pipeline.
“We leave increasingly confident that Microsoft is making progress on its rich product roadmap, with Microsoft 365 Copilot (the AI assistant feature for Microsoft 365 applications) and Fabric (an analytics solution) expected to go live by the end of year,” said the 5-star analyst. “Our conversations suggested a healthy demand pipeline, with thousands of customers on the waitlist for M365 Copilot (despite a beta of ~600 customers), and the rollout of Fabric’s private beta to 22K customers (the largest preview for the company).”
Microsoft is witnessing a 35% increase in developer productivity with the implementation of GitHub Copilot among its developer base, and it anticipates $100 million in cost savings through enhanced efficiency via the use of Azure AI Studio. These have instilled in Rangan greater confidence that its backlog can “convert to paying users” as companies are naturally keen on solutions that promise high returns on investment and swift time-to-value. Microsoft’s ability to bring these features to the market quickly leads Rangan to anticipate a surge in adoption once they become available in early CY24. Although Microsoft intends to monetize most of these services individually, Rangan emphasizes that Sales Copilot and other AI-driven services oriented towards customer relationship management (CRM) are likely to experience widespread customer adoption before Microsoft capitalizes on additional revenue opportunities.
With Rangan seeing the TAM (total addressable market) of Generative AI at “well over” $135 billion and representing a revenue opportunity that can eclipse $10 billion, he recognizes Microsoft as “one of the most compelling investment opportunities in the technology industry and across sectors.”