Jefferies' Top Analyst Names Microsoft Stock 'Top AI Pick'
Jefferies' top analyst, Brent Thill, called Microsoft (MSFT) stock 'our top AI pick' after returning impressed from the tech giant's annual developer conference, MSFT Build 2025, held in Seattle last week. Thill maintained his 'Buy' rating on MSFT stock, along with a price target of $550, which implies 22.2% upside potential from current levels. He stated that Microsoft is focused on becoming more of an artificial intelligence (AI) platform, positioning it strongly to capitalize on the rapidly-evolving AI sector.
Confident Investing Starts Here:
Thill is a five-star analyst on TipRanks, ranking #118 out of the 9,562 analysts covered. He boasts an impressive success rate of 67% and an average return per rating of 13.20%.
Thill's 5 Key Takeaways from Microsoft Build
The Microsoft Build conference brings together thousands of developers and technology enthusiasts, offering them hands-on experience and the opportunity to connect with Microsoft's engineers. Each year, the event showcases the company's latest technologies, tools, and platforms, with a focus on Microsoft's ecosystem, including Windows, Azure Cloud Services, NET, Microsoft 365, AI, and more.
Let's take a brief look at Thill's 5 key takeaways from this year's conference.
Microsoft is expected to roll out its updated Copilot platform, which leverages the power of AI reasoning through Researcher and Analyst agents.
Thill noted that although Copilot's adoption is still in its early stages, the company remains committed to rolling out the updates.
The analyst cited two major barriers for Copilot's success: data access and governance, which could hamper the model's accuracy as well as its ability to operate transparently, ethically, and securely.
He believes the overall macroeconomic environment remains cautiously optimistic, but Microsoft is mostly viewed as a safe haven.
Thill anticipates that Microsoft is leaning toward becoming an open platform and hub for AI.
To conclude, Thill noted that developers were generally excited about Copilot's improvement over the past three to six months and its ability to quickly integrate future reasoning models. He also mentioned that the updated Copilot, with enhanced research capabilities, will help narrow the gap between OpenAI's Deep Research. Additionally, the rollout of Copilot Search and Copilot Memory in June should further close this gap.
Is Microsoft Stock a Good Buy?
Wall Street remains highly optimistic about Microsoft's long-term stock trajectory. On TipRanks, MSFT stock has a Strong Buy consensus rating based on 30 Buys and five Hold ratings. Also, the average Microsoft price target of $512.34 implies 13.8% upside potential from current levels. Year-to-date, MSFT stock has gained 7.2%.
See more MSFT analyst ratings
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
an hour ago
- Globe and Mail
US Court Blocks Trump Tariffs, Offering Brief Market Relief Amid Trade Uncertainty
Financial markets experienced temporary relief Thursday after a U.S. trade court blocked most of President Donald Trump's recent tariffs, ruling that the administration overstepped its legal authority. The surprise judgment offered momentary support to sectors hit hardest by trade disruptions, including automakers, banks, luxury brands, and semiconductor makers, although the Trump administration swiftly announced plans to appeal the Wall Street initially rallied, with index futures gaining over 1.5%, optimism faded as investors digested ongoing uncertainties around Trump's next moves and the potential for prolonged legal battles. Currency markets mirrored this cautious sentiment: the U.S. dollar's early rally against traditional havens such as the yen and Swiss franc tapered off as investors reconsidered the broader economic implications of the court Overview: U.S. trade court ruling temporarily halts broad tariff implementation. Dollar strength and stock market gains fade as uncertainty lingers. European auto, luxury, and financial sectors see initial rebound. Key Points: Court finds Trump administration exceeded authority under emergency powers act. Administration vows immediate appeal, maintaining tariff-related uncertainties. Chipmakers and banks lead initial market gains amid temporary relief. Looking Ahead: Markets brace for continued volatility as legal appeals unfold. Trade talks with major partners face delays and new complexities. Companies likely to remain cautious, delaying investments and strategic decisions. Bull Case: The U.S. Court of International Trade blocked the implementation of most of President Trump's recent tariffs, ruling that the administration exceeded its authority, which provided immediate, albeit temporary, relief to financial markets and sectors heavily impacted by trade disruptions. Stock markets, particularly in Asia and Europe, rallied on the news, with U.S. stock futures also showing significant gains, reflecting investor optimism that the ruling could slow momentum for a broader trade war. The ruling could reduce the U.S.'s average effective tariff rate significantly (e.g., from 15% to 6.5% according to one estimate), which would be a positive for U.S. consumers and businesses that bear the cost of tariffs. Sectors like automakers, banks, luxury brands, and semiconductor makers, which had been under pressure from tariff threats, saw an initial rebound in their stock prices. The court's decision might diminish President Trump's leverage in ongoing trade negotiations with key U.S. trading partners, potentially leading to more stable and predictable trade policies if upheld. The U.S. dollar initially strengthened against safe-haven currencies like the yen and Swiss franc, and oil prices rebounded, indicating a shift towards risk-on sentiment. Bear Case: The Trump administration immediately announced plans to appeal the court's ruling, indicating that the legal battle over tariffs is far from over and that market volatility is likely to persist. The initial optimism in markets faded as investors digested the ongoing uncertainties, with the U.S. dollar's rally tapering off and stock market gains becoming more modest. Analysts warn that the court's decision adds another layer of unpredictability to Trump's trade initiatives, and the administration may seek alternative legal avenues to implement tariffs, potentially leading to comparable duties under different statutes. The ruling does not affect all tariffs; for example, tariffs on foreign steel, aluminum, and autos, which were invoked under a different law, remain in place. The legal process, including appeals that could reach the Supreme Court, will take time, leaving businesses in a state of uncertainty and potentially delaying investment and strategic decisions. Even if the ruling is ultimately upheld, the broader trade tensions and the administration's focus on tariffs as a policy tool are likely to continue, creating ongoing risks for global businesses and supply chains. The situation could disrupt ongoing trade negotiations, as trading partners may be cautious and observe whether a higher court might overturn the decision, potentially delaying the finalization of trade agreements. Despite the reprieve, analysts warn that volatility is far from over, as Trump's trade strategy continues to cause upheaval for global businesses. Firms like General Motors and Ford have already abandoned financial forecasts for the year, and international companies such as Honda, Campari, Roche, and Novartis weigh shifting operations to mitigate risks from ongoing trade the face of persistent uncertainty, investors remain wary. While the court's ruling buys critical time for businesses to prepare and potentially limits the scale of tariffs temporarily, market volatility will likely remain heightened, with many participants prepared for renewed disruptions as Trump's appeal process unfolds.
CBC
an hour ago
- CBC
Appeals court allows Trump's tariffs
A U.S. appeals court ruled that President Donald Trump's tariffs — including many on Canadian goods — can stay in place for now, a day after a trade court deemed some of the policy was illegal. The Trump administration is standing behind the tariff plan and pledging to take the issue to the Supreme Court.
Globe and Mail
2 hours ago
- Globe and Mail
Is SoundHound AI a Buy?
Artificial intelligence (AI) stocks soared over the past two years as investors got excited about this potentially game-changing technology. And SoundHound AI (NASDAQ: SOUN), a company specializing in voice AI, saw its share price take off as part of this new gold rush. Over 2023 and 2024, SoundHound stock surged 1,000%, outperforming AI market superstar Nvidia, which climbed 800% during that period. But AI stocks lost some of their luster earlier this year amid concerns about economic growth and potential spending on this newish technology. President Trump set out plans for tariffs on imports, and investors worried that these duties would increase prices on a wide range of products, paving the way to a weak economy and even a recession. As a result, investors fled high-growth companies that could be among the first to suffer in such an environment. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » And that resulted in declines in AI stocks, including SoundHound. The voice AI player has lost about 50% since the start of the year. Yet the company continues to deliver explosive growth, reporting a revenue increase of 151% in the recent quarter. Meanwhile, Trump's initial tariff deal with China has offered investors optimism that tariffs may not be as tough on the economy as expected -- and that's helped indexes rebound. Is SoundHound AI a buy now? Let's find out. Why SoundHound stands out So, first, a bit of background on SoundHound, a company that stands out from rivals in the voice AI space thanks to its innovation. Most voice AI systems translate speech to text and then to meaning, but SoundHound translates speech directly into meaning. While this might seem like a detail, it actually makes a huge difference, resulting in speed and accuracy. This technology is protected by more than 200 patents, and this, along with strong barriers to entry, offer SoundHound a competitive advantage. All of this has helped SoundHound grow in a wide range of industries, from restaurants to automotive, healthcare, finance, and more. For example, the company recently expanded its phone answering and AI services contract with a major U.S. pizza chain. And in healthcare, it expanded or renewed contracts with three customers, including a major medical billing company. In the quarter, as mentioned, revenue soared in the triple digits. And importantly, revenue from each individual customer came in at 10% or less of total revenue, showing that SoundHound doesn't rely heavily on just one or two contracts but instead is well diversified. The fact that SoundHound's revenue totaled just under $30 million in the quarter suggests this company has plenty of room for expansion. The total addressable market for SoundHound's services is about $140 billion. SoundHound's strengths in AI agents This company also is taking big steps in an area that could represent the next AI growth driver, and that's agentic AI. This involves software that applies AI to real world problems by studying complex situations, finding solutions, and applying them. SoundHound recently launched its Amelia 7.0 platform, one that customers across industries can use to carry out a range of key tasks. SoundHound offered an example during its earnings call, saying Amelia could handle your reordering of a hard-to-pronounce prescription, the payment of a recent medical visit, and the making of a new appointment. It's also positive to note that SoundHound has a cash position of $246 million and doesn't have debt. So this AI player is in great shape to deliver more growth, especially considering that the AI market is expected to reach beyond $2 trillion by the early 2030s. This market isn't all voice AI, of course, but this enormous size shows demand for AI in general is high -- and SoundHound could be well positioned to benefit. A steep valuation All of this is great, but it's important to keep in mind that, even considering recent declines, SoundHound stock still looks pricey at current levels, trading at 38 times sales. So investors who are more value-oriented may find investments more adapted to their style elsewhere. It's also important to remember that in a market where uncertainty remains, investors may hesitate to invest in smaller, younger AI companies like SoundHound and may opt for giants like Nvidia or more diversified businesses like Amazon. This could weigh on SoundHound's performance in the near term. So, is SoundHound a buy? This depends on your comfort with risk and your investment style. As mentioned, SoundHound isn't a buy for value investors, and cautious investors should look to other stocks too. But for patient growth investors who plan on holding on for the long term, SoundHound makes a solid buy on the dip today. Should you invest $1,000 in SoundHound AI right now? Before you buy stock in SoundHound AI, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoundHound AI wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor 's total average return is982% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.
