Microsoft Unveils AI-Powered Copilot to Boost Productivity, But Questions Remain on Valuation
-
Microsoft launched Copilot, a generative AI tool for Microsoft 365 to increase productivity. There are business and consumer versions.
-
Copilot Pro uses GPT-4 and DALL-E 3 and costs extra - $50/month for business users and $20/month for consumers.
-
If 10% of business Microsoft 365 users adopt Copilot and 5% of consumers adopt Copilot Pro, it could provide an $18 billion annual revenue boost.
-
This would be highly profitable revenue growth for Microsoft since the upfront investment has already been made.
-
However, Microsoft stock already trades at a 35 P/E, so even with AI revenue growth, the valuation may be too high for more upside.