From NBCUniversal: 2024-09-04 15:42:03

Microsoft’s generative artificial intelligence prospects are promising, but the stock offers more to investors beyond the new technology. Jim Cramer believes Microsoft is the tech stock to buy, with a record high of $467 on July 5. Among the megacap tech stocks, Microsoft has shown resilience despite recent market fluctuations.

Wells Fargo analysts highlight Microsoft’s potential growth drivers, including search, cybersecurity, and enterprise software. They added the stock to their “Signature Picks” list with an overweight rating and a $515 price target. Despite Google’s dominance in search, Microsoft’s Bing could gain market share if Google loses exclusivity deals due to antitrust cases.

Microsoft’s cybersecurity business has become a major player, surpassing $20 billion in revenue in a 12-month period. Analysts also see growth potential in the company’s customer relationship software suite, Dynamics, thanks to cross-sell opportunities. Despite recent hurdles, including a CrowdStrike upgrade causing IT outages, Microsoft’s focus on AI and cybersecurity bodes well for future growth.

Investors can expect a pick-up in Azure revenue in the second half of the year, as management remains bullish about the outlook. Along with Wells Fargo’s positive outlook, Piper Sandler added Microsoft to its high-conviction buy list due to AI tailwinds. Despite challenges, Microsoft remains a strong investment option with multiple growth drivers beyond AI technology.

Read more: Cramer names Microsoft (MSFT) as No. 1 underappreciated megacap to buy