TipRanks
5 min read
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As a longtime observer of Microsoft (MSFT), I’m particularly optimistic about the upcoming Build 2025 conference, the tech giant’s leading developer conference, scheduled for next week in Seattle.
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The event can serve as a bullish price catalyst, especially as Microsoft showcases its deepening commitment to AI agent technology. This strategic pivot has meaningful implications for revenue growth, margin expansion, and long-term shareholder value, particularly through products like Microsoft 365 Copilot.
If Microsoft can effectively commercialize these AI capabilities, the financial upside could be substantial. However, the market has yet to fully reflect this opportunity in the company’s current valuation, so I’m firmly bullish on MSFT stock.
When Microsoft holds its Build 2025 conference, I’ll look for major announcements on AI convergence, particularly across Windows, Azure, and Microsoft 365. Following the direction established by last year’s advancements, I’m anticipating more sophisticated and autonomous AI agent functionality. We might, for example, witness sophisticated Copilot functionality that runs routine PC tasks on its own, transforming user productivity.
Azure could also be front and center, possibly announcing next-generation AI tools and potentially new hardware such as a second-generation Maia AI chip. This would position Azure as a leader in cloud-based AI services. Microsoft may also demonstrate new in-house AI models, reducing dependence on external providers and improving long-term profitability.
Perhaps most compelling is that Microsoft’s AI efforts represent its best opportunity to drive revenue and margin expansion in the future. Take Microsoft 365 Copilot, for example—a $30-per-user-per-month add-on to existing subscriptions, a nice upsell opportunity. With Microsoft’s enormous global user base, even low-single-digit adoption rates would translate to billions of dollars in incremental annual revenue, much of which would be high-margin.
This new source of revenue is not just incremental but actually improves Microsoft’s profitability model. Microsoft’s recent quarterly results provide initial proof of this promise. Azure expanded by approximately 33%, with roughly half of that growth directly tied to new AI services.
