Wells Fargo Lifts Microsoft Target to $650 on Homegrown AI Models
Updated
Updated · CNBC · Jun 1
Wells Fargo Lifts Microsoft Target to $650 on Homegrown AI Models
3 articles · Updated · CNBC · Jun 1
$650 is Wells Fargo's new price target for Microsoft, up from $625 and implying 44% upside from Friday's close.
The bank tied the increase to Microsoft's push to build more of its own AI stack, arguing investments in models, software and Copilot should drive broader adoption over time.
This week's Build conference in California is expected to showcase new AI tools, including a coding model alongside GitHub Copilot and models for reasoning, transcription and images.
Wells Fargo said about two-thirds of Microsoft's $37 billion AI business likely comes from OpenAI and Anthropic activity on Azure plus OpenAI revenue sharing, with the rest from Microsoft 365, GitHub Copilot and other services.
The bullish call broadly matches Wall Street sentiment—56 of 60 analysts rate the stock buy or strong buy—even after shares have fallen nearly 7% this year.
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Overview
Wells Fargo has reinforced its bullish outlook on Microsoft, raising the price target and maintaining an Overweight rating as investor interest in Microsoft’s AI strategy grows. The bank believes Microsoft’s unique strength in the software layer is undervalued by the market. Microsoft has responded by taking proactive steps to enhance its AI capabilities, including boosting capacity and refining its AI models. These actions, combined with strong financials and a strategic focus on AI, support Wells Fargo’s view that Microsoft is well-positioned for future growth, especially as the company continues to innovate and expand its AI offerings.