Supported by “robust” consumer demand, Microsoft (NASDAQ:MSFT) maintains its lead in the evolution of artificial intelligence technology, notes Wells Fargo. Microsoft executive Mat McBride compared the company’s current AI efforts to the early scaling of its Azure cloud architecture. McBride pointed out, meanwhile, that Microsoft is currently playing a pioneering role with less historical data to evaluate the results of its AI-related initiatives.
Despite this hurdle, Microsoft is confident in its short- and long-term spending intentions, according to Wells Fargo analyst Michael Turrin. With an overweight rating and a $515 price target on the company, Turrin said continued consumer interest is driving Microsoft’s investments in artificial intelligence and data centers. This represents an increase of more than 19.5% compared to current prices.
Citing two consecutive quarters of higher capital spending as evidence of easing supply chain constraints. Additionally, buoyed by continued interest in AI-related developments despite reversals in industry-related stock market gains, Microsoft shares are up 14.7% year to date.
This article first appeared on GuruFocus.