Microsoft Corporation (NASDAQ:MSFT) is one of the AI Stocks Analysts are Tracking Closely. On October 28, Mizuho reiterated its “Outperform” rating on the stock with a $640 price target. The firm calls the recent OpenAI agreement a win-win for both Microsoft and the ChatGPT maker.
The new agreement between the two companies will allow OpenAI to go ahead with its plans to transform into a for-profit public benefit corporation. Microsoft will hold 27% of the OpenAI Group PBC, valued at an estimated $135 billion. Meanwhile, OpenAI’s nonprofit arm will hold a $130 billion stake in the for-profit entity.
Mizuho believes that this renewed OpenAI deal helps secure Azure exclusivity, IP rights, and revenue share, underpinning its AI leadership and growth confidence.
“This morning, MSFT and OpenAI announced an important agreement reflecting updates to the partnership. We previously contended that, despite growing investor concern, this relationship continues to be both healthy overall and a significant positive for MSFT. In our view, today’s announcement clearly supports that. In the end, while neither party got all that it wanted, we believe this agreement is a win-win. For MSFT, it critically retains its revenue share for the foreseeable future, along with exclusive IP rights and Azure API exclusivity until Artificial General Intelligence (AGI) is attained, while obtaining a ~27% equity stake and ceding its right of first refusal. More broadly, we remain confident MSFT’s revenue growth opportunities over the medium-term and beyond are greater than many realize, and we remain very bullish on its tangible AI adoption and monetization levers. We reiterate our Outperform rating and maintain our PT of $640.”
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
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