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According to Wedbush, Microsoft is the stock to buy as the company maintains its lead in generative AI with Chat GPT.
As Alphabet catches up with Bard, Microsoft is preparing to monetize its AI lead.
“We believe Microsoft is in a unique position to gain share of the cloud market while offering additional AI capabilities,” Wedbush said.
The fight in the field of generative artificial intelligence will continue after the Alphabet’s I/O conference on Wednesdayon which the Google parent company updates for its AI platform Bard announced, always heated.
Stay, according to Wedbush analyst Dan Ives Microsoft however, the stock to buy. With his participation in Chat GPT the company maintained its lead in the field of artificial intelligence. It is also preparing to begin commercial exploitation.
“The AI monetization opportunity makes us more optimistic for [Microsoft]’ he said on Thursday. “We believe Microsoft is in a unique position to acquire stakes in Cloud Market to win and at the same time deploy additional AI capabilities. We estimate that the overall cloud market could grow by 35 to 40 percent in the coming years.”
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Thanks to Microsoft strategic stake in Chat GPT with a $10 billion (€9.2 billion) investment in OpenAI, the company could take cloud ownership from Amazon’s AWS offering.
“Microsoft is in a privileged position. In the cloud arms race, Microsoft could gain market share over AWS over the next 12 to 18 months,” Ives said. “We also believe that the Redmonders are in the process of reaching the next level of growth with Chat GPT and AI. In the years to come, this could represent a new level of growth in Microsoft history.”
Ives reiterated his “Outperform” rating on Microsoft while raising his price target on Microsoft to $340 from $325. This corresponds to an upside potential of 9 percent.
While Alphabet continues to lag behind in the AI space, the company is gearing up for a head-to-head race with Microsoft. The search engine giant also hinted that it plans to integrate AI capabilities into all aspects of its product range, including the cloud.
“As demand for AI applications increases across industries, we see the improvements and integrations of generative AI as an advantage in the AI race. It’s now a matter of who can gain market share with the innovations coming out over the course of the year,” says Ives.
Despite Alphabet’s budding opportunities in the AI sector, he still prefers Microsoft over Alphabet. He has neither an official recommendation nor a price target for Google.
“We remain firmly of the belief that Microsoft’s groundbreaking early investment in Chat GPT gave it the decisive edge in this Game of Thrones-style battle for big tech. The Google group now has to catch up,” says Ives.
Disclaimer: Stocks and other investments are always associated with risk. A total loss of the invested capital cannot be ruled out either. The published articles, data and forecasts are not an invitation to buy or sell securities or rights. They also do not replace professional advice.
This text was translated from English by Jannik Rade. You read the original article here.
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