Goldman Sachs Group, Inc.: Microsoft Corporation (MSFT.US) is showcasing to Wall Street the path to monetizing AI investments, with its stock price soaring to nearly an 18-year high.

Goldman Sachs Group, Inc. analyst Gabriela Borges stated that Microsoft Corporation (MSFT.US) is sending clearer signals to investorsits investments in the field of artificial intelligence now have diversified monetization pathways. As a result, Microsoft Corporation's stock price recorded its largest single-day increase in nearly 18 years on Thursday. In an interview on Thursday, Borges said, "Microsoft Corporation's ability to leverage different mechanisms for monetization is revealing more and more clues, which are much more apparent now than they were before." Microsoft Corporation's earnings report released on Wednesday showed that its cloud business grew at the fastest rate since 2022, indicating that its AI and computing services are gaining customer recognition, while capital expenditure growth is showing signs of slowing. Fueled by this, Microsoft Corporation's stock surged. Borges maintained a "buy" rating on Microsoft Corporation and raised the 12-month target price by nearly 5% to $640, implying about 64% upside potential compared to Wednesday's closing price. She pointed out, "One of the main bearish arguments against Microsoft Corporation over the past 6 to 12 months has been that the Copilot product has not yet reached an ideal state." However, she also noted that product quality is continuously improving, and the increase in user numbers helps create a "positive feedback loop." On Thursday in the New York market, Microsoft Corporation's stock price jumped 17.5% to $458 at one point, nearing its largest single-day increase since October 2008. Borges positions Microsoft Corporation as a value discovery targetcurrently, Alphabet Inc. Class C dominates the enterprise AI application sector, with nearly 90% of the Fortune 100 companies adopting Google's Gemini enterprise version. However, Microsoft Corporation disclosed on Wednesday that its paid seats for 365 Copilot had surpassed 30 million, significantly up from around 20 million three months ago, showing that its flagship AI assistant is seeing increased adoption in the enterprise sector. Borges said that Microsoft Corporation had been "ignored by the market for several quarters," and investors generally believed that Alphabet Inc. Class C was in the lead. But she believes that the next 12 months will prove that the gap between the two is "not as bad as people think," and that there have been "significant improvements behind the scenes for Microsoft Corporation." Borges stated that the large-scale adoption of Copilot is still in the early exploratory stage, comparing the current phase to "broad trial and error to find a good product-market fit," but she is confident about the maturation of application scenarios. "I have no doubt that six months or a year from noweven reflecting on Goldman Sachs Group, Inc.'s own application experiences over the past 12 monthswe will have made significant progress in enhancing our daily work with these tools," Borges said.