Microsoft could hit $5 trillion thanks to AI, Dan Ives says

Wedbush hiked its price target on Microsoft to $600 on AI optimism.

Transcript

00:00Microsoft continues to hit new all-time highs, Dan, and you're getting more bullish.

00:04You just raised your price target on Microsoft to $600. Tell us why.

00:09I mean, I think Microsoft, when it comes, we're going to be talking about $4 trillion, eventually $5 trillion,

00:14because it's in their backyard in terms of AI.

00:17I think when I look at the stack, the AI stack, commercial cloud growth, I think is going to continue to massively accelerate.

00:25We're seeing more and more Microsoft customers go full in on the stack.

00:31And that's something where only 20% of Microsoft today is what I view as cloud, next-gen cloud, next-gen AI.

00:39As that becomes 50%, 60%, and that's really a whole revaluation that's going to happen in the name.

00:46$600, I ultimately think is probably conservative.

00:49Is Microsoft and Azure's strength at the expense of Amazon, AWS, and Alphabet, Google, Cloud, though?

00:57Because you're also bullish on those names.

00:59Yeah, look, I think Microsoft's clearly leading when it comes to hyperscale and comes to cloud.

01:05I do think AWS, Google, they've had success, started to narrow the gap.

01:09But it's not a zero-sum game.

01:11I mean, you're going to have all beneficiaries here.

01:13But no doubt, Microsoft and Nadella are leading when it comes to the infrastructure, when it comes to hyperscale.

01:20And that's been a huge part of their success.

01:22And I don't see that slowing down.

01:24I think investors are just starting to recognize now the next leg of this Microsoft story as you go into that golden age of software.