Microsoft stock surged Tuesday after the software giant detailed how it plans to monetize its innovations in artificial intelligence.
At the company's Inspire conference, Microsoft gave pricing information around its AI technology. The Redmond, Wash.-based company will charge enterprise customers $30 a month for each user of Microsoft 365 Copilot, an AI-based productivity tool, Microsoft said in a blog post.
The pricing was much higher than expected, Jefferies analyst Brent Thill said in a note to clients. That showed the company's confidence in the product as well as its pricing power, he said.
Thill also reiterated his buy rating on Microsoft stock with a price target of 400.
Microsoft Stock Rises On Inspire News
On the stock market today, Microsoft stock jumped 4% to close at 359.49. Earlier in the session, it notched an all-time high of 366.78.
Wedbush Securities analyst Daniel Ives said the AI pricing news was "an eye-popping announcement and one the Street has been waiting for on pins and needles."
"We view the initial pricing details as very bullish for the total addressable cloud AI market opportunity for Microsoft," Ives said in his note to clients.
Ives rates Microsoft stock as outperform with a price target of 375.
Ives predicted that more than 50% of Microsoft enterprise customers will adopt its AI functionality over the next three years.
Microsoft Debuts Bing Chat Enterprise
Also at Inspire, Microsoft announced Bing Chat Enterprise, an expansion of its AI-enhanced Bing search engine. Bing Chat Enterprise is for internal use by corporations and organizations, the company said. It can help employees quickly generate content, analyze or compare data, summarize documents and more.
Bing Chat Enterprise is rolling out in preview mode and is included at no additional cost to Microsoft 365 enterprise and business customers. Further, it will be available in the future as a stand-alone offering for $5 per user per month, Microsoft said.
The Microsoft Inspire conference is taking place online Tuesday and Wednesday.
Meanwhile, Microsoft stock is on the IBD Tech Leaders and Long-Term Leaders lists.
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