Morgan Stanley analysts believe Microsoft (NASDAQ:MSFT) is best positioned to capitalize on CIOs' prioritization of AI/ML.
Analysts, who have an Overweight rating and a $415 price target on the stock, made the claim based on Morgan Stanley's 4Q23 CIO survey takeaways.
According to the bank, 63% of CIOs expect to use at least one of Microsoft's Generative AI products over the next 12 months, while 37% of CIOs plan to use Azure OpenAI Services (up from 27% in 2Q23) and 38% plan to use Microsoft 365 Copilot (up from 22% in 2Q23) in the next 12 months.
"Microsoft widened its lead as the #1 share gainer of IT wallet as a result of the shift to the cloud on both a 1-year and 3-year view," analysts wrote.
In addition, they stated that Microsoft appears poised to continue to benefit from vendor consolidation in areas such as Observability, Automation, and RPA. The bank also feels that MSFT's valuation remains at a discount to large-cap peers.