Microsoft Adding To Its Generative AI Product Line

Shares of Microsoft were at the top of the Dow Industrials on Thursday, hitting a new all-time high and adding 2.4% by the close. The rally came as the company announced it will be releasing Copilot for Security, an AI tool to help businesses fight cybersecurity attacks, on April 1 this year. Gains came despite an overall bearish attitude on Wall Street Thursday in response to stronger than expected producer price inflation data.

Copilot for Security was first announced by Microsoft a year ago in March 2023. The generative AI tool is used to help businesses of all sizes quickly respond to and defend from cybersecurity attacks. Microsoft plans on offering the tool through a pay as you go subscription model. This can help smaller businesses access the tool, and as the business grows it can update its usage and costs according to its needs and budget.

Wells Fargo analyst Michael Turrin, who rates Microsoft overweight with a $460 price target, said in a note to clients that he believes this type of pricing model will help encourage adoption, similar to what’s been seen with many other service as a subscription products. The $460 price target represents a roughly 10% upside from Thursday’s close.

J.P. Morgan analyst Mark Murphy also believes that Copilot for Security will be positive for Microsoft’s growth. Murphy also has an overweight rating on the stock with a $440 price target. He sees a strong product/market fit for the generative AI product due to its code generation, pattern recognition, and automated remediation capabilities.

Microsoft shares are up 13.1% in 2024 versus a 3.2% gain for the Dow Industrials.