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On Wednesday, Microsoft (MSFT, Financial) shares grew nearly 3% despite Morgan Stanley lowering their price target from $548 to $540. However, the investment company kept its Overweight rating to reflect its belief in Microsoft's future growth while standing behind Microsoft's market leadership and new artificial intelligence technology prospects.
Morgan Stanley said that investors worry about Microsoft's revenue levels and how the company invests money and develops AI technologies. The market reacted to fears about Microsoft's partnership with OpenAI.
The company sees these challenges as temporary while seeing GenAI as a huge potential growth area. At the same time, in reconfirming its positive stance on Microsoft's potential, the company maintained its strong endorsement of Microsoft as a profitable investment.
Through alliances and its AI technology base, Microsoft builds leadership positions in new markets, which strengthen investors' expectations of long-term business development.
This article first appeared on GuruFocus.