In a recent note, Wedbush analysts expressed strong confidence in Microsoft's (NASDAQ:MSFT) latest performance, particularly emphasizing the significance of the company's "validation moment for AI."
According to Wedbush, the investor world was keenly awaiting Microsoft's results, and the conference call, coupled with FY25 guidance, did not disappoint.
CEO Satya Nadella and CFO Amy Hood highlighted a robust commercial bookings growth in the June quarter, with Azure's growth expected to "accelerate in the second half" from a 29% baseline.
This commentary, according to Wedbush, underscores the broader AI revolution within the tech world, providing the validation that the market was seeking.
Wedbush maintains an Outperform rating and a $550 price target on Microsoft.
The analysts emphasized that the most critical takeaway from the conference call was Redmond's discussion on AI monetization trends, which are anticipated to accelerate in FY25 as more enterprise customers adopt Azure, Copilot, and AI solutions for their operations.
The firm explains that while the quarterly results were solid but not extraordinary, the Street is digesting the very optimistic outlook on AI deployments.
The growth of Copilot users and the foundation of a strong Intelligent Cloud segment were seen as key highlights.
Wedbush said the broader tech sector takeaway is clear: "[The] AI monetization story is real, AI capex is building out a new IT infrastructure for the next 15 years."
Wedbush's note concludes with a bullish sentiment, stating, "Nothing from this quarter or conference call makes us less bullish in our AI thesis."
The firm adds that the validation from CEO Nadella and Microsoft adds significant credibility to the AI revolution story, reinforcing that this AI revenue opportunity is indeed happening and solidifying Microsoft's position as a leader in this transformative space.