DA Davidson Reiterates Buy on Microsoft, $550 PT

DA Davidson analyst Gil Luria reiterated a Buy rating and $550.00 price target on Microsoft (NASDAQ: MSFT).

“Turns out Microsoft has already built the orchestration layer – it is called CoPilot.

While investors may have thought of CoPilot as an AI model in itself, it is already working as a tool that helps funnel queries and tasks to the appropriate model…[A] user can choose models, choose whether to look at internal data, and choose which agent to use, or allow CoPilot to route the prompt in the most efficient and appropriate manner.

That is the definition of an orchestration layer.

We believe one of the next important steps for Microsoft will be to integrate more open-source models that can help their customers mitigate rising AI bills.

While that lane is open in the US, NVIDIA has shown an inclination to fill it, and we suspect Meta may choose to swim back into this lane.

We believe it is unlikely Chinese models will have a major role in American enterprise AI, given the nature of the bilateral relationship.”

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